Canada Stocks: TSX ends higher after US inflation data reassures rate-cut bets

Cae

14/08/2024 21:24

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      U.S. CPI in line with expectations 
    

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      CAE Inc jumps after results 
    

  
 (Updates to close)
    By Nivedita Balu
       Aug 14 (Reuters) - Canada's main stock index ended in
the green on Wednesday, as investors betting on U.S. Federal
Reserve's rate cut next month were reassured after inflation
south of the border slowed to below 3% for the first time in
over three years. 
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  rose 141.83 points, or 0.63%, at 22,760.01
    A closely watched U.S. inflation data print showed consumer
prices rebounded as expected in July, and the annual increase in
inflation slowed to below 3% for the first time since early
2021, supporting the view inflation was being tamed.
    "With inflation continuing to progress in the right
direction, they (the Fed) will likely signal the start of a new
easing cycle later this month at the Jackson Hole," said Angelo
Kourkafas, investment strategist at Edward Jones Investments.
    Investors have grappled with worries about a slowdown in the
world's biggest economy, while looking ahead to the start of the
Fed's easing cycle. Lower U.S. interest rates typically lead to
more demand for riskier assets such as equities. 
    "There have been some concerns that the US economy is
slowing, the consumer is slowing, but... retail sales number
(later this week) will help investors gauge the state of the
economy," Kourkafas said.
    The S&P 500 closed higher. However, Alphabet  GOOGL.O  and
some megacap tech stocks traded lower, which weighed on the
Nasdaq composite.  .N  
    In Canada, energy  .SPTTEN , healthcare  .GSPTTHC  and
financials  .SPTTFS  were among sectoral gainers. The healthcare
sector rose 1.8%, led by a 4.3% rise in Tilray Brand shares
 TLRY.TO . 
    Meanwhile, the energy sector gained 0.9% as crude prices
edged higher despite easing supply concerns over rising conflict
in the Middle East. 
    The broader materials sector  .GSPTTMT  led sectoral losses,
falling 0.7%, as gold prices  XAU=  dipped after investors
trimmed bets for larger Fed rate cuts.  GOL/  
    Among individual stocks, CAE Inc  CAE.TO  rose 5%, after the
company's first-quarter revenue beat estimates. 
    Franco-Nevada Corp  FNV.TO  lost 6.3%, after the company
reported quarterly adjusted earnings below expectations. 

 (Reporting by Lisa Mattackal in Bengaluru; Editing by Shreya
Biswas and Alistair Bell)
 ((Nikhil.Sharma@thomsonreuters.com;))