Canada Stocks: Toronto market notches 18-month high as financials climb

Canfor

19/12/2023 21:29

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      TSX ends up 1.05% at 20,839.63
    

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      Posts its highest closing level since June 2022
    

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      Financials rise 1.3%; materials group adds 2.4%
    

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      Canadian CPI holds steady at 3.1% year-over-year
    

  
 (Updates to market close)
    By Fergal Smith
       Dec 19 (Reuters) - Canada's main stock index rose on
Tuesday to an 18-month high, led by financial and forest product
shares, giving investors with spare cash an incentive to
increase their market exposure, analysts said.
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  ended up 216.92 points, or 1.05%, at 20,839.63, its
highest closing level since June 2022.
    "Many investors are underweight equities and not positioned
for a sustained market rally," said Brandon Michael, senior
investment analyst at ABC Funds. "The biggest risk for cash
heavy investors is when to commit their ample cash reserves to
the market."
    The Toronto market has strengthened 11.5% since October as
investors bet that central banks will shift to cutting interest
rates in the coming months.
    "The market is forward looking and sees interest rates lower
in the future and an economic outlook that's improving," Michael
said.
    Still, money markets reduced bets that the Bank of Canada
would begin easing as soon as March after data showed Canada's
annual inflation rate unexpectedly remaining at 3.1% in
November.
    Financials, the sector with the highest weighting on the
TSX, rose 1.3%, while the materials group, which includes
precious and base metals miners and fertilizer companies,
advanced 2.4%.
    Forest product companies were among the biggest gainers,
with shares of Canfor Corp  CFP.TO  ending up 12.3%.
    Gold and copper prices rose, while oil settled 1.3% higher
at $73.44 a barrel, extending the previous session's gains after
attacks by Yemen's Iran-aligned Houthi militants on ships in the
Red Sea disrupted maritime trade.
    Energy was up 1.5% and consumer staples added 1.4%.

 (Reporting by Fergal Smith in Toronto and Shashwat Chauhan in
Bengaluru; Editing by Tasim Zahid, Shweta Agarwal and Richard
Chang)
 ((fergal.smith@thomsonreuters.com; +1 647 480 7446))