Canada’s precious metals miners, lumber stocks and base metals have dropped sharply, led by Iamgold Corp.’s 46% slump since that central bank decision. Other miners are following closely behind, including First Majestic Silver Corp., down 43%, Hudbay Minerals falling 40% and Ero Copper Corp. dropping 39%.
“Rates are rising and it’s going to hit all cyclical industries,” Stifel Canada managing director and portfolio strategist James Hodgins said, with higher interest rates hitting lumber stocks as homebuilding and the real-estate sectors slow. He expects copper miners to fall as well amid recession concerns.
“This is a bit of an unprecedented cycle,” Hodgins said, adding that in recent down cycles, central banks haven’t had to worry about inflation as they stepped in to lower rates. Now, with inflation surging at its fastest pace since 1983 in Canada, the bank has signaled rates will continue to rise.
(By Geoffrey…
