Canada Stocks: TSX climbs as GDP data cements hopes of interest rate pause

Aritzia

29/09/2023 16:11

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      TSX up 0.3%
    

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      IT leads sectoral gains 
    

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      TSX set for worst month since May
    

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      Canada's economy stalled in July
    

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      Aritzia up on strong Q2 results
    

  
    By Khushi Singh
       Sept 29 (Reuters) - Canada's main stock index edged
higher on Friday, the last trading day of the quarter, as
softer-than-expected GDP data bolstered hopes of a rate pause by
the Bank of Canada, even as it heads to mark its worst quarter
in more than a year.     
    At 10:33 a.m. ET (14:33 GMT), the Toronto Stock Exchange's
S&P/TSX composite index  .GSPTSE  was up 51.63 points, or 0.26%,
at 19,642.37.  
    The benchmark index, however, is on track to mark its worst
quarter since June 2022 while also clocking its worst month
since May.
    The Canadian economy was unchanged in July, as a slight
increase in services-producing industries offset the decline in
the goods-producing sector.
    "Inflation lags the Canadian economic cycle, and there are
growing signs that the impact of earlier interest rate increases
are working to cool the economy," said Claire Fan, economist at
Royal Bank of Canada, in a note.
    Money markets see a 74% chance that the Bank of Canada will
keep its benchmark rate unchanged next month, according to LSEG
data.
    The Canadian dollar  CAD=  strengthened against its U.S.
counterpart on Friday, while the yield on benchmark government
debt  CA10YT=RR  slipped. 
    Rate-sensitive information technology sector  .SPTTTK  added
1.7%, while the real estate index  .GSPTTRE  was up 1.0% as
softer-than-expected U.S. inflation and domestic GDP data fueled
hopes of a pause in interest rate hikes.
    Stateside, consumer spending increased in August, but
underlying inflation moderated, with the year-on-year price
rise, excluding food and energy prices, slowing to below 4.0%.
    Consumer discretionary shares  .GSPTTCD  gained 1.0% on a
10.6% jump in Aritzia Inc  ATZ.TO  shares after the apparel
design house beat quarterly result estimates.
    The materials sector  .GSPTTMT , which includes precious and
base metals miners and fertilizer companies, rose 0.5%, tracking
the prices of most metals.  MET/L  
    Gold prices rose, helped by a retreating dollar and Treasury
yields, as data showed U.S. core price inflation slowed in
August. GOL/  
    The energy sector  .SPTTEN  dropped 0.6% as oil prices
slipped, shedding earlier gains in the session.  O/R 

 (Reporting by Khushi Singh in Bengaluru; Editing by Tasim
Zahid)
 ((Khushi.Singh@thomsonreuters.com;))