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CANADA STOCKS-Toronto stocks follow Wall St lower on hawkish Fed comments

·1 min read

(Adds comment, updates prices)

By Aniruddha Ghosh

Aug 26 (Reuters) - Canada's main stock index fell on Friday, echoing a weak sentiment on Wall Street, after Federal Reserve Chair Jerome Powell said U.S. monetary policy will need to be tight "for some time" before inflation is under control.

At 11:05 a.m. ET (1505 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 199.68 points, or 0.99 percent, at 19,972.66.

Wall Street's main indexes tumbled nearly 2% on Friday after Powell also said people should not expect the Fed to dial back quickly until the inflation problem is fixed.

All the Canadian sectors were lower, with technology and healthcare stocks weighing the most as expectations of rising rates dented the high-growth sectors.

"It's probably a touch more hawkish than some had expected," Greg Taylor, portfolio manager at Purpose Investments said. "For the Canadian markets, it's really going to all come down to oil price more than anything else."

Oil prices also fell about 1%, dragging the energy sector down by 0.4%.

After a strong rally since hitting year-lows in July, Canadian stocks have stalled in the recent days as central bank policymakers struck a hawkish tone on interest rates despite signs of economic slowdown.

The benchmark TSX index is set for its second consecutive weekly decline.

Among single stocks, OpenText fell 12.4% after the Canadian software company agreed to buy British enterprise software maker Micro Focus in an all-cash deal valuing it at $6 billion including debt. (Reporting by Aniruddha Ghosh and Sruthi Shankar in Bengaluru; Editing by Krishna Chandra Eluri and Maju Samuel)