Canada Stocks: TSX breaks 7-day winning streak on growth worries

Canada Stocks: TSX breaks 7-day winning streak on growth worries

Canada's main stock index looked to break a seven-day winning streak on Tuesday, as prospects of aggressive monetary tightening by central banks stoked concerns of a global economic slowdown.

Record inflation in the eurozone and hawkish comments from a U.S. Federal Reserve governor have raised bets that central banks may have to tighten monetary policy faster or more than signaled, leaving investors concerned about the hit to economic growth.

Bank of Canada is seen hiking its overnight rate by 50 basis points to 1.5% on Wednesday to tame soaring inflation, which hit over a three-decade high in April.

Broad-based losses saw the Toronto Stock Exchange's S&P/TSX composite index slip 212.29 points, or 1.01%, to 20,707.11, after adding 4% over the last seven sessions.

"The U.S. Federal Reserve going to have to raise interest rates more than the market anticipates to bring inflation down. That would be a negative," said Bill Harris, partner and portfolio manager at Avenue Investment Management in Toronto.

"Earnings are really going to be impacted into the fall, because we are going to have much more of a recessionary economy than what the markets are predicting."

Data on Tuesday showed Canada's economic growth was not as robust as expected in the first quarter,