Canadian Market Up In Positive Territory After BoC's Rate Cut Announcement

(RTTNews) - The Canadian market is up in positive territory around noon on Wednesday, with investors cheering the Bank of Canada's decision to cut interest rate by 25 basis points.

Technology, materials, real estate, utilities and industrials shares are among the prominent gainers. Several stocks from energy and consumer sectors also posted notable gains.

The benchmark S&P/TSX Composite Index is up 133.62 or 0.6% points at 22,111.79 a few minutes past noon.

The Canadian central bank lowered interest rates by 25 basis points, citing continued evidence that underlying inflation is easing. The central bank's target for the overnight rate now drops to 4.75%, with the bank rate and deposit rate at 5% and 4.75%, respectively.

The bank's accompanying statement noted its preferred measures of core inflation has slowed, while three-month measures suggest continued downward momentum.

However, the central bank noted risks to the inflation outlook remain and said its Governing Council is closely watching the evolution of core inflation.

The Governing Council remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behavior, the bank said.

GFL Environmental Inc (GFL.TO) is up more than 3.5%. Kinaxis Inc (KXS.TO), Teck Resources (TECK.A.TO), Celestica Inc (CLS.TO) and Descartes Systems Group (DSG.TO) are gaining 2.6 to 3.3%.

Stantec (STN.TO), Franco-Nevada Corporation (FNV.TO), CGI Inc (GIB.A.TO), WSP Global (WSP.TO), Goeasy (GSY.TO), Waste Connections (WCN.TO) and Constellation Software (CSU.TO) are up 1.3 to 2%.

Fortuna Silver Mines (FVI.TO) is plunging more than 13%. Great-West Lifeco (GWO.TO) is down 3.4%. Nutrien (NTR.TO), Tecsys (TCS.TO), Methanex Corporation (MX.TO) and iA Financial Corporation (IAG.TO) are also notably lower.

Bank stocks Canadian Imperial Bank of Commerce (CM.TO), Bank of Montreal (BMO.TO), National Bank of Canada (NA.TO) and Royal Bank of Canada (RY.TO) are weak following the Bank of Canada's decision to cut interest rate by a quarter percentage point.

On the economic front, the S&P Global Canada Composite PMI rose to 50.6 in May, up from 49.3 in the prior month, to signal the first expansion in the country's private sector in a year.

The S&P Global Canada Services PMI reading for May came in at 51.1, up from April's 49.3, marking the first increase in activity in a year and the highest reading since April 2023.

Meanwhile, productivity in Canada decreased to 99.96 points in the first quarter of 2024 from 100.23 points in the fourth quarter of 2023, data from Statistics Canada showed.