Canadian Market Modestly Higher In Cautious Trade

(RTTNews) - Canadian shares are turning in a mixed performance on Thursday with investors digesting the rate cut moves by the Bank of Canada and the European Central Bank, in addition to the latest batch of economic data from Canada and the U.S.

Investors now await U.S. non-farm payrolls data for the month of May for further clues about the outlook for U.S. interest rates.

Materials and energy stocks are finding some support. Shares from the rest of the sectors are turning in a mixed performance.

The benchmark S&P/TSX Composite Index, which advanced to 22,234.97, was up 41.58 points or 0.2% at 22,186.60 a little while ago

In economic news, the Ivey Purchasing Managers Index in Canada fell to 52 in May, after rising to a two-year high of 63 in the prior month. The latest reading indicated a tenth consecutive month of growth in Canadian economic activity, though the weakest in the current sequence.

Data from Statistics Canada showed the nation's trade deficit dropped to about C$ 1.05 billion in April, from C$ 2 billion in March. Exports surged 2.6% to C$ 64.5 billion, while imports increased by 1.1% to C$ 65.5 billion in the month.

Transcontinental Inc (TCL.A.TO) is up 3.3%. Filo Corp (FIL.TO) is gaining 4.6% and Endeavour Mining Plc (EDV.TO) is up 3.6%. Agnico Eagle Mines (AEM.TO) and Cameco Corporation (CCO.TO) are higher by 2.3% and 2.2%, respectively.

West Fraser Timber (WFG.TO), Wheaton Precious Metals (WPM.TO), Cargojet (CJT.TO), Stella-Jones (SJ.TO), Tourmaline Oil Corp (TOU.TO), Methanex Corp (MX.TO), Franco-Nevada Corporation (FNV.TO), goeasy (GSY.TO) and Toromont Industries (TIH.TO) are up 1 to 2%.

Among the losers, Canopy Growth Corporation (WEED.TO) is declining 8%. Canopy announced that it has established an at-the-market equity program that allows the company to issue and sell up to $250 million of common shares of the company from treasury from time to time in concurrent public offerings in the United States and Canada.

Celestica Inc (CLS.TO) is down 4%. GFL Environmental (GFL.TO) is lower by nearly 2%.

EQB Inc (EQB.TO), Bombardier Inc (BBD.B.TO), Colliers International (CIGI.TO) and Bank of Montreal (BMO.TO) are also notably lower.

On Wednesday, the Bank of Canada reduced its target for the overnight rate to 4.75%, with the bank rate at 5% and the deposit rate at 4.75%. The decision to cut rate came as recent data has increased the central bank's confidence that inflation will continue to move towards its 2% target.

The European Central Bank (ECB) has cut interest rate for the first time since September 2019, reducing the key interest rate by 25 basis points. The bank has raised inflation forecasts for 2024 and 2025.

The ECB has raised the headline inflation outlook for 2024 to 2.5% from 2.3% previously, and upped the forecast for 2025 to 2.2% from 2%.