Canada Stocks: Gold mining shares lift Toronto market as U.S. inflation slows

Aritzia

12/07/2023 21:25

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      TSX ends up nearly 1% at 20,070.77
    

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      BoC hikes rates by 25 basis points
    

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      Materials sector rallies 1.7%
    

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      Energy gains 0.2%; oil settles 1.2% higher
    

  
 (Updated at market close)
    By Fergal Smith
       July 12 (Reuters) - Toronto's main stock index rose on
Wednesday to its highest closing level in one week, as commodity
prices rallied after data that showed inflation cooling in the
United States and despite the Bank of Canada raising interest
rates further.
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  ended up 192.21 points, or nearly 1%, at 20,070.77,
its highest closing level since last Wednesday.
    "Lower inflation in the U.S. - presumably that means lower
inflation in North America," said Barry Schwartz, a portfolio
manager at Baskin Financial Services.
    "Inflation is dead. Stick a fork in it. It's overcooked ...
"This is a huge welcome relief and this rally is well deserved."
    U.S. stocks rose as cooling inflation supported hopes the
Federal Reserve is nearing the end of its tightening campaign.
    Commodity prices also climbed, including gains for gold and
copper as the U.S. dollar  .DXY  fell , while oil settled 1.2%
higher at $75.75 a barrel.
    The Toronto market's energy sector rose 0.2%, while the
materials group, which includes precious and base metals miners
and fertilizer companies, was up 1.7%.
    Resource shares account for roughly 30% of the Toronto
market's weighting.            
    The Bank of Canada hiked its benchmark interest rate by a
quarter of a percentage point to a 22-year high of 5.0%, and
said it could raise rates further because of the risk of
inflation stalling above its 2% target.
    Higher interest rates "could put pressure on the Canadian
consumer over the short and medium term and the banks," Schwartz
said.
    Laurentian Bank of Canada  LB.TO  was a standout. Shares of
Canada's ninth largest bank jumped 26.6% after the bank said it
is conducting a review of strategic options.
    In contrast, Aritzia  ATZ.TO  tumbled 23.9% after the
apparel and accessories retailer reported quarterly earnings.

 (Reporting by Fergal Smith in Toronto and Shashwat Chauhan and
Siddarth S in Bengaluru; Editing by Shweta Agarwal and David
Gregorio)
 ((fergal.smith@thomsonreuters.com; +1 647 480 7446;))