TSX Fails To Hold Early Gains, Ends Marginally Down

(RTTNews) - Despite the Bank of Canada's decision to cut interest rates for a third straight month, the Canadian market failed to hold early gains and settled slightly down on Wednesday, weighed down by losses in the energy sector.

The benchmark S&P/TSX Composite Index, which climbed to 23,146.03 around mid morning, ended the day's session at 23,040.76 with a marginal loss of 1.69 points.

As widely expected, the Bank of Canada announced that is decided to lower interest rates by a quarter point for the third straight meeting.

The Canadian central bank reduced its target for the overnight rate by 25 basis points to 4.25%, with the Bank Rate at 4.5% and the deposit rate at 4.25%. The central bank said it decided to continue lowering rates due to continued easing in broad inflationary pressures.

The accompanying statement noted inflation slowed further to 2.5% in July, with high shelter price inflation starting to slow.

"Excess supply in the economy continues to put downward pressure on inflation, while price increases in shelter and some other services are holding inflation up," the Bank of Canada said.

"Governing Council is carefully assessing these opposing forces on inflation," the bank added. "Monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook."

The Bank of Canada noted the economy grew by 2.1% in the second quarter, led by government spending and business investment, and added that the labor market continues to slow, with little change in employment in recent months, but noted wage growth remains elevated relative to productivity.

Gains in real estate and healthcare stocks, and positive display by a few stocks from communications, utilities, consumer discretionary and financials sectors helped limit the market's downside.

The Energy Capped Index ended 1.81% down as weak oil prices weighed on energy stocks. Prairiesky Royalty (PSK.TO) ended more than 3% down. Secure Energy Services (SES.TO), Imperial Oil (IMO.TO), Cenovus Energy (CVE.TO), Kelt Exploration (KEL.TO) and Cenovus Energy (CVE.TO) ended lower by 2 to 2.4%.

Real estate stocks Riocan Real Estate (REI.UN.TO), Interrent Real Estate Investment Trust (IIP.UN.TO), Storagevault Canada Inc (SVI.TO), Primaris (PMZ.UN.TO), H&R Real Estate (HR.UN.TO) and Allied Properties (AP.UN.TO) gained 2 to 3.6%.

Quebecor Inc (QBR.TO), K-Bro Linen (KBL.TO) and GDI Integrated Facility Services (GDI.TO) gained 4.8 to 5.2%.

Bombardier Inc (BBD.B.TO), Cameco Corporation (CCO.TO), TerraVest Industries (TVK.TO), EQB Inc (EQB.TO), WSP Global (WSP.TO), Boardwalk Real Estate (BEI.UN.TO) and iA Financial Corporation (IAG.TO) climbed 1 to 2%.

ATS Corporation (ATS.TO), Imperial Oil (IMO.TO), Suncor Energy (SU.TO), Onex Corporation (ONEX.TO), Precision Drilling Corporation (PD.TO), Stantec (STN.TO), Shopify Inc (SHOP.TO), Molson Coors Canada (TPX.B.TO), Descartes Systems Group (DSG.TO) and Agnico Eagle Mines (AEM.TO) ended down 1 to 3.2%.

Data from Statistics Canada said Canada recorded a trade surplus of C$ 0.68 billion in July 2024, the first since February, following a downwardly revised deficit of C$ 0.18 billion in June. Exports dropped by 0.4% to C$ 65.7 billion, while imports fell by 1.7% to C$ 65 billion.