CANADA STOCKS-TSX pares weekly decline as Fed rate cut bets rise
Canada's TSX index rose 0.9% to 30,160.65, paring its weekly loss to 0.5%, driven by gains in technology and financial sectors amid hopes for a Fed rate cut. Magna International shares surged 5.6%. Investors anticipate a 60% chance of a December rate cut, up from 20% after U.S. jobs data. Energy sector fell 0.8% as oil prices dropped.
(Updates to market close)
TSX ends up 0.9% at 30,160.65
For the week, the index loses 0.5%
Technology and financials both add 1.3%
Magna International shares jump 5.6%
By Fergal Smith
Nov 21 (Reuters) - Canada’s main stock index clawed back much of its weekly decline on Friday as financial and technology shares climbed on rising hopes that the Federal Reserve will cut U.S. interest rates in December.
The S&P/TSX composite index (.GSPTSE) ended up 254.10 points, or 0.9%, at 30,160.65. For the week, the index was down 0.5%.
Wall Street’s main indexes also rallied after New York Fed President John Williams said the central bank can still cut rates “in the near term” without putting its inflation goal at risk. Investors see a roughly 60% chance the Fed will lower borrowing costs next month, up from 20% before the release of U.S. jobs data on Thursday. (0#USDIRPR)
“It seems like the macro concerns regarding the Fed and what they’re thinking … are superseding corporate earnings, which have been very strong,” said Ian Chong, a portfolio manager at First Avenue Investment Counsel Inc.
“At some point, value investors will dip back into the market, especially high quality companies, given the strong Q3 corporate earnings.”
The technology sector (.SPTTTK) , which has been buffeted in recent days by concern about the massive level of artificial intelligence spending, rose 1.3%, with e-commerce company Shopify Inc (SHOP.TO) adding 2.1%. The United Arab Emirates said it will invest up to $50 billion in Canada under a framework that includes projects in artificial intelligence, energy and mining sectors.
The materials group (.GSPTTMT) , which includes metal mining shares, added 1.1% as copper (HGc1) prices rose.
Financials (.SPTTFS) were up 1.3% and consumer discretionary (.GSPTTCD) added 2.4%. Shares of auto parts supplier Magna International Inc (MG.TO) climbed 5.6%. China’s Guangzhou Automobile Group will build its electric AION V model at a Magna facility in Austria, the two companies said on Thursday.
Energy (.SPTTEN) was the only one of 10 major sectors to end lower. It fell 0.8% as the price of oil (CLc1) settled 1.6% lower at $58.06 a barrel.
