Canada Stocks: Toronto stocks recover after First Republic rescue package

Fortuna Mining

16/03/2023 20:49

(Updates to close)
       TORONTO, March 16 (Reuters) - Canada's main stock index
closed higher on Thursday, rebounding from initial losses on
news that First Republic Bank  FRC.N  received $30 billion in
deposits from several big banks as part of a rescue package. 
        Shares of First Republic and other banks have slumped on
fears of a contagion after the collapse of SVB Financial Group
and Signature Bank.
  
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  rose 160.17 points, or 0.83%, to 19,539.01. The index
had opened lower as caution prevailed around financial stocks
even after Credit Suisse  CS.N  had secured a credit line of up
to $54 billion from the Swiss central bank to shore up liquidity
and investor confidence.
        "Today marked a key reversal for the TSX," said Brandon
Michael, senior investment analyst at ABC Funds. "The problem is
it's heavy in financials and energy stocks, which tend to do
well in a higher interest rate environment ... and as a result
of the regional banking crisis, investors are recalibrating
their interest rate expectations."
  
        "I expect the TSX to underperform its counterparts south
of the border," he added.
  
    Energy stocks  .SPTTEN  rose 0.5% after starting the day
losing 1.9% as oil prices fell more than 1%.
    Financials  .SPTTFS , the largest sector by weight on the
Canadian index, gained 0.6% while Canada's technology sector
 .SPTTTK  rose 1.7%.
    Fortuna Silver Mines  FVI.TO  shed 6.2% after reporting a
fourth-quarter loss, dragging the broader materials sector
 .GSPTTMT  down 0.01%.
    Meanwhile, the European Central Bank raised interest rates
50 basis points as promised, despite financial market chaos and
calls by investors to hold back policy tightening at least until
sentiment stabilizes.
    In Canada, wholesale trade increased 2.4% in January from
December on higher sales in machinery, equipment and supplies,
and the food, beverage and tobacco products subsectors.

 (Reporting by Maiya Keidan; Editing by Richard Chang)
 ((Maiya.Keidan@thomsonreuters.com; 44 207 542 1594; Reuters
Messaging: maiya.keidan.thomsonreuters.com@reuters.net))