Toronto stocks are up as resource-linked stocks gain.
Canada's main index of stocks rose on Thursday. This was largely due to gains in mining shares, as the latest U.S. data confirmed the possibility of an interest rate cut by a quarter basis point next week.
The Toronto Stock Exchange’s S&P/TSX Composite index rose 87.91, or 0.38% to 23,299.08, and hovered near a new record high.
The materials sector in Canada led the way with a 2.8% increase, aided by gold prices at record levels and a surge of copper.
B2Gold Corp. topped the index.
The domestic markets also responded to the economic data coming out of the United States. This included the U.S. Producer Prices that increased slightly more than anticipated in August. However, the trend was consistent with subsiding prices, which confirmed the possibility that the Federal Reserve could cut interest rates by a quarter point.
The markets are pricing an 87% probability of a 25 basis points cut at the policy meeting on Sept. 18, while bets to reduce by 50 bps stand at only 13%.
Michael Sprung is the president of Sprung Investment Management. He said that "pundits were a bit too optimistic about how fast rates would fall."
The number of U.S. jobless claims increased marginally in the last week. This indicates that layoffs are still low, even though the labor market is slowing.
Shopify Inc., a company based in New York, was the largest laggard of the index. GFL Environmental fell 1.7% and Ballard Power Systems dropped 1.1%.
B2gold Corp, Altagas Ltd, and Calibre Mining Corp. were the three most traded stocks by volume.
The TSX heavyweights in the energy sector rose 1% while the financials group gained 0.2%.
Brent crude prices rose by 0.78%, while West Texas Intermediate crude futures increased by 0.92%. Gold rose by more than 1%.
Canada's largest exports are crude oil and gold.
The TSX has gained 11.4% this year. (Reporting by Nikhil Sharma in Bengaluru; Editing by Shreya Biswas)
(source: Reuters)
