Canada Stocks: Canada shares end at 10-month high on Fed's rate guidance

Transcontinental

13/12/2023 21:31

(Updates to market close, adds fresh comment)
    By Shashwat Chauhan and Ismail Shakil
       Dec 13 (Reuters) - Canada's main stock index rose about
2% on Wednesday to a ten-month closing high in a broad-based
rally as investors embraced risk on bets after the U.S. Federal
Reserve signaled lower borrowing costs are coming in 2024.
    At 4:10 p.m. provisional close, the Toronto Stock Exchange's
S&P/TSX composite index  .GSPTSE  was up 395.61 points, or
1.96%, at 20,629.45, its highest close since Feb. 3. The strong
gains mirrored the rally on Wall Street  .N , where the Dow
Jones Industrial Average  .DJI  hit its first record high since
January 2022.
    The Federal Reserve held interest rates steady on Wednesday
and signaled in new economic projections that the historic
tightening of U.S. monetary policy engineered over the last two
years is at an end and lower borrowing costs are coming in 2024.
    "The markets are cheering the Fed's decision," said Barry
Schwartz, chief investment officer and portfolio manager at
Baskin Wealth Management.
    "The initial headline of no rate increase was well
understood by the markets but the commentary in the presser that
he (Fed Chair Jerome Powell) gave got markets excited and the
commentary is that pretty much they know they need to act on
interest rates well before inflation looks like it's going to
reach the 2% level."
    The real estate and the utilities sectors, which
underperformed in an era of higher interest, were the top
performers on the TSX.
    Among individual stocks, Bank of Nova Scotia  BNS.TO  added
1.1% after Canada's No. 4 lender unveiled plans to focus more at
home and Mexico in CEO Scott Thomson's first shareholder
meeting.
    H&R Real Estate Investment Trust  HR_u.TO  jumped nearly 10%
after announcing the sale of Toronto waterfront property, 25
Dockside Drive, for C$232.5 million.
    Vermilion Energy  VET.TO  gained 6.2% buoyed by 2024 budget
which included plans to boost dividend by 20%.
    Transcontinental  TCLa.TO  gained 3.5% after the packaging
company reported a rise in fourth-quarter adjusted profit per
share.

 (Reporting by Shashwat Chauhan in Bengaluru, Ismail Shakil in
Ottawa; Editing by Shweta Agarwal and Alistair Bell)
 ((Shashwat.Chauhan@thomsonreuters.com;))