Canada Stocks: TSX touches record high on bets of larger Fed rate cut

B2Gold

16/09/2024 16:04

(Updated at 10:11 a.m. ET/ 1411 GMT)
    By Nikhil Sharma
       Sept 16 (Reuters) - Canada's main stock index edged up
to an all-time high on Monday, driven by gains in healthcare
shares, while investors bet on a heftier U.S. interest-rate cut
later this week.
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  was up 54.98 points, or 0.23%, at 23,623.63. It had
notched record-high closing levels in the past two sessions.
    At least nine sectors gained, led by a near 1% rise in
healthcare  .GSPTTHC . Bausch Health Companies  BHC.TO  jumped
6.7% after reports of unit Bausch + Lomb  BLCO.N  exploring sale
options.
    The domestic index pared initial gains, however, taking cues
from Wall Street after the tech-heavy Nasdaq  .IXIC  registered
an over 1% decline. 
    Odds of a 50-basis-point rate cut at the end of the U.S.
Federal Reserve's two-day meeting on Wednesday have risen to
63%, from 30% last week, according to the CME's FedWatch tool.
        "It's probably the first cut of many to come" and that
gives a boost to the resource-heavy Canadian market for a number
of reasons, said Allan Small, senior investment advisor at Allan
Small Financial Group with iA Private Wealth.
  
        Zero-yield gold and other dollar-denominated commodities
tend to benefit from lower U.S. interest rates. Crude oil and
gold are among Canada's top exports.
  
    The Bank of Canada has already cut its interest rates three
consecutive times this year, bringing the policy rates down from
a two-decade high of 5% to 4.25%.    
    On the data front, Canadian factory sales grew by 1.4% in
June from May on higher sales of petroleum and coal products, as
well as chemical products.
    The TSX's financials sector  .SPTTFS  climbed 0.4%, while
energy stocks  .SPTTEN  rose 0.35%.
        West Texas Intermediate crude futures  CLc1  rose 2.51%
and Brent crude  LCOc1  gained 1.98%.  O/R 
  
    The TSX has added 12.7% for the year.

    

 (Reporting by Nikhil Sharma in Bengaluru; Editing by Leroy Leo
and Devika Syamnath)
 ((Nikhil.Sharma@thomsonreuters.com;))