Canadian Market Modestly Higher After BoC Lowers Interest Rate By 50 Bps

(RTTNews) - After a fairly solid move up north in early trades Wednesday morning, the Canadian market pared some gains after the Bank of Canada reduced its benchmark rates by 50 basis points as widely expected.

Materials and technology stocks are among the prominent gainers. Healthcare, communications and utilities stocks are weak.

The benchmark S&P/TSX Composite Index, which climbed to 25,631.55 earlier in the session, was up 81.36 points or 0.32% at 25,585.69 a little while ago.

The Bank of Canada said it decided to reduce its target for the overnight rate by 50 basis points to 3.25%, with the Bank Rate at 3.75% and the deposit rate at 3.25%.

The Canadian central bank, which lowered interest rates by 50 basis points in October on the heels of three straight 25 basis point cuts, said the decision to continue slashing rates is intended to support growth and keep inflation close to the middle of the 1-3% target range.

The central bank said the need for further rate cuts would be evaluated "one decision at a time." "Our decisions will be guided by incoming information and our assessment of the implications for the inflation outlook," the bank said. "The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target."

In its statement, the Bank of Canada noted the possibility U.S. President-elect Donald Trump's incoming administration will impose new tariffs on Canadian exports to the U.S. has increased uncertainty and clouded the economic outlook.

Novagold (NG.TO), the top gainer in the Materials Index, is up nearly 6%. Ssr Mining (SSRM.TO) is up 5.7% and Aya Gold and Silver (AYA.TO) is rising 4.5%. Pan American Silver Corp (PAAS.TO), Calibre Mining (CXB.TO), Orla Mining (OLA.TO), First Majestic Silver (AG.TO), New Gold (NGD.TO), Seabridge Gold (SEA.TO), Iamgold Corp (IMG.TO), Silvercrest Metals (SIL.TO), Wesdome Gold (WDO.TO), B2Gold Corp (BTO.TO) and Alamos Gold (AGI.TO) are gaining 3 to 4%.

Technology stocks Sangoma Technologies (STC.TO), Constellation Software (CSU.TO), Quarterhill (QTRH.TO), Bitfarms (BITF.TO) and Celestica Inc (CLS.TO) are up 1 to 1.7%.

Roots Corporation (ROOT.TO) is soaring 10.3% after reporting a net income of $2.4 million for the third quarter, compared to net income of $0.5 million in the year-ago quarter.

Healthcare stock Tilray Inc (TLRY.TO) is down 4.4%. Bausch Health Companies (BHC.TO) is down more than 10% after Blackstone decided not to proceed with a joint takeover bid for eyecare company Bausch + Lomb.