TSX Recovers After Weak Start, Ends On Firm Note

RTTNews | 857 dni temu

(RTTNews) - After a weak start, the Canadian market emerged higher Wednesday morning and stayed firm right till the end of the session to finish on a fairly strong note.

As widely expected the Bank of Canada raised its key rates by 75 basis points and signaled further tightening in the coming months to fight inflation.

Healthcare, technology, materials, consumer discretionary and industrials shares posted strong gains. Several stocks from financials and real estate sections too ended on a strong note, while energy stocks fell on weak crude oil prices.

The benchmark S&P/TSX Composite Index dropped to 18,981.97 in early trades, but rallied to 19,264.46 later on in the session before finally settling at 19,241.44 with a gain of 153.29 points or 0.8%.

BRP Inc (DOO.TO), Colliers International (CIGI.TO), Magna International (MG.TO), WSP Global (WSP.TO), Constellation Software (CSU.TO), FirstService Corporation (FSV.TO), Canadian Tire Corporation (CTC.A.TO) and Franco-Nevada Corporation (FNV.TO) gained 2.1 to 3.25%.

Among the prominent losers, Vermilion Energy (VET.TO) drifted down nearly 8%. MEG Energy Corp (MEG.TO) ended 6.5% down, while Enerplus Corp (ERF.TO), Paramount Resources (POU.TO), Imperial Oil (IMO.TO), Teck Resources (TECK.A.TO), Canadian Natural Resources (CNQ.TO) and Precision Drilling (PD.TO) shed 2.3 to 5.4%.

The Bank of Canada today hiked its interest rates by 75 basis points to a 14-year high, and said the policy rate would need to go higher still given the fight against raging inflation.

The Canadian central bank raised its target for the overnight rate to 3.25%, with the Bank Rate at 3.5% and the deposite rate at 3.25%. The bank also said it is continuing its policy of quantitative tightening.

The 75 basis point rate hike marks the fifth straight increase in interest rates by the Bank of Canada and follows a 100 basis point rate hike in July.

"As the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target," the Bank of Canada said.

The bank added, "The Governing Council remains resolute in its commitment to price stability and will continue to take action as required to achieve the 2% inflation target."

Data from Statistics Canada showed Canada posted a trade surplus of C$ 4.1 billion in July of 2022, narrowing from a downwardly revised surplus of C$ 4.9 billion in the previous month.

Exports fell by 2.8% to C$ 68.3 billion in July, the first monthly decrease in 2022. Imports dropped by 1.8% to C$ 64.2 billion, the data showed

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