Sept 12 (Askume) – Canada’s main stock index rose on Thursday, benefiting from gains in mining shares and as the latest U.S. economic data further strengthened the prospect of a quarter-point interest rate cut next week.
The Toronto Stock Exchange S&P/TSX Composite Index (.GSPTSE) rose 87.91 points, or 0.38%, to 23,299.08, close to a record high.
The Canadian materials (.GSPTTMT) sector gained 2.8%, led by record gold and copper prices .
Leading the index’s gains were B2Gold Corp <BTO.TO> and OceanaGold Corp (OGC.TO), which rose 8.7% and 6.6%, respectively, while Equinox Gold Corp (EQX.TO) added 5.5%.
Domestic markets also reacted to US economic data, which included a slightly bigger-than-expected increase in US producer prices in August , but the trend was still consistent with a decrease in inflation and the possibility of a 25 basis point interest rate cut by the Federal Reserve was confirmed.
The market expects an 87% chance of a 25 basis point interest rate cut in the policy meeting on September 18, while the chance of a 50 basis point interest rate cut is only 13%.
“Experts are a little too optimistic about how quickly rates will fall,” said Michael Sprung, president of Sprung Investment Management.
The number of people applying for unemployment benefits in the United States increased slightly last week, indicating that layoff levels are still low despite the labor market slowing.
Back home, the worst performers on the index were Shopify Inc (SHOP.TO) down 2.2%, GFL Environmental (GFL.TO) down 1.7% and Ballard Power Systems (BLDP.TO) down 1.1%.
The most traded stocks by trading volume are B2gold Corp (BTO.TO) , Altagas Ltd (ALA.TO) and Calibre Mining Corp (CXB.TO) .
The TSX’s heavyweight energy sector (.SPTTEN) rose 1%, while financials (.SPTTFS) added 0.2%.
In the oil market, West Texas Intermediate crude oil futures rose 0.92%, while Brent crude oil prices rose 0.78%. Gold rose more than 1%.
Crude oil and gold are Canada’s largest exports.
The Toronto Stock Exchange was up 11.4% for the year.
