Canada Stocks: Energy shares boost TSX as investors digest inflation data

iA Financial

18/02/2025 21:39

(Updates to close)
    By Pranav Kashyap and Nivedita Balu
       Feb 18 (Reuters) - Canada's main stock index closed
higher on Tuesday, powered by energy and financial shares, as
investors digested news that inflation inched higher in January.
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  closed up 165.61 points, or 0.65%, at 25,648.84.
        The heavyweight energy sector  .SPTTEN  rose 1.4% with
oil prices as traders assessed the fallout from drone attacks on
a key conduit for Kazakhstan's oil exports.  O/R  Traders were
still cautious as talks to end the war in Ukraine could boost
Russian supplies.
  
        Financials  .SPTTFS  also added 0.8%, led by iA
Financial  IAG.TO  and the country's biggest lender Royal Bank
of Canada  RY.TO .
  
        Bay Street analysts expected big banks to post strong
first-quarter results next week, but noted an uncertain outlook
for the rest of 2025 due to risk of a tariff war between the
U.S. and other countries.
  
        Materials  .GSPTTMT  rose 1.2% as it tracked a jump in
gold prices driven by persistent demand for safe-haven assets. 
  
        Separately, January's annual inflation rate in Canada
rose slightly to 1.9% from December.
  
        While lower prices from a sales tax reprieve provided
some relief, they were partly offset by rising costs of gasoline
and natural gas, as shown in Tuesday's data.
  
        The yield on Canada's 10-year benchmark bond  CA10YT=RR 
and the 5-year benchmark bond  CA5YT=RR  hit three-week highs,
exerting pressure on equities earlier in the day. 
    "There is clear evidence that underlying inflation pressures
are building," said Stephen Brown, deputy chief North America
economist at Capital Economics. "Given the tariff threat hanging
over the economy, we still think the odds slightly favour
another cut from the Bank of Canada next month, but it is
shaping up to be a close call."
        The threat of tariffs somewhat receded as global
attention shifted to the developments in the Ukraine conflict
involving U.S. President Donald Trump and his Russian
counterpart, Vladimir Putin.
    In other stocks, Fortuna Mining  FVI.TO  lost 8.3% after
CIBC downgraded the miner to "underperform" from "neutral." 


    
    FOR CANADIAN MARKETS NEWS, CLICK ON CODES:
    TSX market report  .TO 
    Canadian dollar and bonds report  CAD/   CA/ 
    Reuters global stocks poll for Canada  EQUITYPOLL1 
 EPOLL/CA 
    Canadian markets directory  CANADA 

 (Reporting by Pranav Kashyap in Bangalore and Nivedita Balu in
Bengaluru; Editing by Shreya Biswas and Richard Chang)
 ((Pranav.Kashyap@thomsonreuters.com; +919886482111))