Canada Stocks: Interest rate sensitive shares lift TSX ahead of BoC decision

Sleep Country Canada Holdings

22/07/2024 21:43

* 
      TSX ends up 0.8% at 22,872.65
    

        * 
      Real estate and utilities sectors lead gains
    

        * 
      Sleep Country Canada jumps on takeover deal
    

        * 
      Air Canada falls after lower profit forecast
    

  
 (Updates at market close)
    By Fergal Smith
       July 22 (Reuters) - Canada's main stock index rose on
Monday, with the real estate and utilities sectors leading a
broad-based rally ahead of an expected interest rate cut this
week by the Bank of Canada.
    The S&P/TSX composite index  .GSPTSE  ended up 182.26
points, or 0.8%, at 22,872.65, moving back in reach of the
record closing high it touched last Tuesday at 22,995.39.
    "Expectations seem to be pretty high for a small interest
rate cut this week and so as a result I think investors are
feeling a little more encouraged that the economy is capable of
holding its own," said Michael Sprung, president at Sprung
Investment Management.
    The BoC is widely expected to cut its benchmark rate by 25
basis points to 4.50% on Wednesday, its second cut in as many
months, after recent data showed inflation cooling.
    "We are still in a very tumultuous period," Sprung said. "I
personally don't believe that inflation is entirely beaten yet
... so I think we are going to have mixed signals for the rest
of the year and the U.S. is election is part of that."    
    Wall Street also advanced as investors reexamined the state
of the presidential race after U.S. President Joe Biden said he
would not pursue a second term.
    The real estate and utilities sectors, which are dominated
by high dividend paying stocks that could particularly benefit
from lower interest rates, rose nearly 2% and 1.3% respectively.
    Heavily weighted financials added 0.9%, energy was up 0.8%
and technology ended nearly 1% higher. Materials was the only
major sector not to notch gains.
    Shares of Sleep Country Canada Holdings Inc  ZZZ.TO  were a
standout, jumping 27.1% after Fairfax Financial  FFH.TO  agreed
to buy the retailer.
    In contrast, Air Canada  AC.TO  shares fell 2.5% after the
company cut its full-year core profit forecast.

 (Reporting by Fergal Smith in Toronto and Nikhil Sharma in
Bengaluru; Editing by Shreya Biswas and Alistair Bell)
 ((fergal.smith@thomsonreuters.com; +1 647 480 7446))