Canadian stock market tumbles on Fed rate hike fears

Canada's main stock index dropped sharply on Tuesday amid market speculation that the U.S. Federal Reserve may raise interest rates in mid-year.

The benchmark Toronto Stock Exchange's S&P/TSX composite index lost 212.73 points, or 1.43 percent, to 14,641.76 points.

Seven out of the eight most weighed sectors declined. Most resources shares lost ground, weighed by the sluggish commodities prices including oil and copper. Utilities inched up 0.15 percent.

The U.S. stock market suffered huge losses on Tuesday after Richard Fisher, president of the Dallas Federal Reserve Bank, said on Monday that the Fed should start to raise rates before the economy reaches full employment to avoid causing a recession. The U.S. economy recently showed robust strength with a sound recovery of the labor market.

The jitters were also felt by the Canadian stock market with Financials, the index's most heavily weighted sector, giving back 1.71 percent. Royal Bank of Canada lost 1.61 percent to 75.69 Canadian dollars (about 59.69 U.S. dollars), and Toronto Dominion Bank tumbled 1.88 percent to 53.20 Canadian dollars per share.

Leading the declines, the metals and mining sector shedded 3.41 percent, with May copper down to 2.6240 U.S. dollars per pound on the Comex division of the New York Mercantile Exchange. Teck Resources Ltd. lost 2.73 percent to 17.44 Canadian dollars, and First Quantum Minerals Ltd. dived 6.99 percent to 14.23 Canadian dollars.

Energy declined 1.35 percent as Suncor Energy Inc. dropped 1.14 percent to 35.54 Canadian dollars and Canadian Oil Sands Ltd. retreated 7.20 percent to 9.15 Canadian dollars.

Info tech and telecom sectors lost 1.96 percent and 1.19 percent, respectively.

On the currency front, weighed by the strong U.S. dollar, the Canadian dollar moved down to 0.7886 U.S. dollars on Tuesday, compared with 0.7939 U.S. dollars on Monday. Endite