TSX jumps to 3-week high as rate cut bets revive
FILE PHOTO: The Art Deco facade of the original Toronto Stock Exchange building is seen on Bay Street in Toronto, Ontario, Canada January 23, 2019. REUTERS/Chris Helgren/File Photo
By Purvi Agarwal
(Reuters) -Canada’s main stock index climbed to its highest in three weeks on Monday amid a broader rally led by resources stocks, as investors factored in a higher chance of Fed rate cuts after soft payrolls data last week.
At 9:51 a.m. ET (13:51 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 144.62 points, or 0.66%, at 22,092.03.
The materials sector jumped 1.8%, with miners like Fortuna Silver Mines and New Gold gaining 4.3% and 4.2%, respectively, tracking higher prices of precious metals. [GOL/]
Energy shares followed with 1.6%, rise as oil prices climbed after Saudi Arabia hiked June crude prices and as slimming prospects of a Gaza ceasefire deal renewed fears of a widening conflict in the Middle East. [O/R]
Resources shares led gains among the broader rally except for healthcare shares that fell 0.2%.
“It’s the spillover from last week. A lot of it has to do with the Federal Reserve mentioning that it still sees the next rate movement as being a cut versus a raise,” said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth.
Data showing that U.S. job growth slowed more than expected in April and annual wage gains cooled had added to bets of a September rate cut by the Federal Reserve, pushing Wall Street indexes to close over 1% higher on Friday. [.N]
Investors will watch out for speeches by Richmond Fed President Thomas Barkin and his New York counterpart John Williams later in the day.
“If any of the Federal Reserve officials were to talk about an interest rate hike, it will move markets,” Small added.
In corporate news, crypto miners Bitfarms and Hit 8 rose 5.2% and 6.0%, respectively, tracking a 1.6% rise in Bitcoin.
(Reporting by Purvi Agarwal in Bengaluru; Editing by Ravi Prakash Kumar)