By Fergal Smith
(Reuters) – Canada’s main stock index rose on Wednesday to its highest level in two months, with technology stocks leading gains after data showed U.S. inflation rising less than expected last month.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 307.64 points, or 1.6%, at 19,885.94, its highest closing level since June 10.
Wall Street also rallied after U.S. consumer price data raised hopes the Federal Reserve will cut back on super-sized interest rate increases.
Investors have worried that aggressive tightening by central banks could push the global economy into a recession.
“Markets have good reason to cheer the CPI number finally,” said Barry Schwartz, portfolio manager at Baskin Financial Services. “It’s taking a lot of heavy lifting by the central banks to raise interest rates and talk down the economy and that seems to be working.”
Canada is expected to report its inflation figures next week. Investors are expecting a half-percentage-point interest rate increase by the Bank of Canada in September after it hiked last month by a full percentage point.
“I would look for more muted hikes going forward in the 50-basis-point range as commodity prices have fallen a little bit,” Schwartz said.
Energy prices have been a major driver of inflation.
The Toronto market’s technology sector jumped 4.2%, paced by a 20.5% gain for Converge Technology Solutions Corp after the company’s adjusted earnings beat estimates.
Heavily-weighed financials rose nearly 2%, while energy added just less than 1% as oil prices settled 1.6% higher at $91.93 a barrel.
The materials group, which includes precious and base metals miners and fertilizer companies, advanced 1.4% despite a 21.6% plunge in the shares of Centerra Gold Inc after it reported quarterly results.
CAE Inc was also a drag, with the 737 MAX simulator maker’s shares tumbling 17.6% after quarterly profit missed expectations.
(Reporting by Fergal Smith; Additional reporting by Johann M Cherian and Shreyashi Sanyal in Bengaluru; Editing by Shailesh Kuber and Deepa Babington)
Source: One America News Network
