By Rashika Singh
March 9 (Reuters) - Canada's main stock index hit a more than three-week low in a broad-based selloff on Monday, as risk sentiment took a hit globally after escalating tensions in the Middle East sent crude prices surging, intensifying inflation concerns.
The S&P/TSX Composite Index slipped 1.25% to 32,671.38 points by 10:57 a.m. ET, after falling more than 2% earlier in the session, in line with a more than 1% decline across major indexes on Wall Street.
Iran named Mojtaba Khamenei
to succeed his slain father as supreme leader, signaling that hardliners remain firmly in charge and the war, which entered its second week, could last longer than previously expected.
The escalating turmoil sent crude oil prices to more than $119 a barrel, hitting levels not seen since mid-2022, as major producers cut supplies and fears of prolonged shipping disruption rattled markets.
"The key issue is how long the price shock lasts and how much damage it inflicts before easing as a prolonged spike in energy costs could revive inflation pressures and even raise the risk of stagflation," said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.
Canada's benchmark stock index has fallen more than 6% from record highs reached just a week ago, as fears that a prolonged Middle East conflict and rising crude prices could fuel global inflation pressured risk assets.
Most sectors were deep in the red, with materials, which includes base and precious metal miners and fertilizer companies, sliding 4.1%, while energy climbed 1.1%, tracking the rise in crude prices.
Consumer discretionary dropped 3.2%, with shares of Burger King-parent Restaurant Brands among the sector's biggest percentage losers, down 4.2%.
Among individual movers, copper miner Lundin Mining lost 6.1% after J.P. Morgan downgraded its stock to "underweight" from "neutral".
(Reporting by Rashika Singh in Bengaluru; Editing by Diti Pujara)
