TSX inches up on technology shares boost, BoC meeting in focus
Jan 22 (Reuters) – Canada’s main stock index edged higher on Monday, bolstered by gains in technology shares and U.S. benchmark S&P 500 hitting a fresh record high, while investors maintained caution ahead of the Bank of Canada’s monetary policy meeting later in the week.
At 10:37 a.m. ET (15:37 GMT), the Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE), opens new tab was up 17.41 points, or 0.08%, at 20,923.93.
Rate-sensitive technology stocks (.SPTTTK), opens new tab led the gains among sectors, rising 0.6%, followed by consumer discretionary stocks (.GSPTTCS), opens new tab that added 0.3%.
The materials sector (.GSPTTMT), opens new tab, which houses Canadian miners, slid 0.5% on lower prices of copper and gold as hopes of a March interest rate cut by the Federal Reserve faded, and poor demand prospects weighed.
Energy shares (.SPTTEN), opens new tab extended losses from last week, falling 0.2% even as oil prices rose on Monday.
Bank of Canada’s monetary policy decision, due Wednesday, would be the next big catalyst for the markets to position bets for the direction of interest rate cuts.
For now, the BoC is expected to leave its key overnight rate unchanged this time.
Money market participants are now pricing in a 20% chance of a cut in borrowing costs in March, while they see a 51% chance of a cut in April. 0#BOCWATCH
“A higher-than-expected inflation reading has questioned the thesis that interest rate hikes are done and that there’s gonna be cuts”, said Matt Manara, partner and portfolio manager at Avenue Investments.
On the corporate side, shares of steel products producer Algoma Steel Group (ASTL.TO), opens new tab slid 4.2% to hit a near six-week low.
Meanwhile, the S&P 500 (.SPX), opens new tab touched a fresh record high on Monday in another session of gains for Wall Street’s major indexes, with investors monitoring the ongoing corporate earnings season and any clues on interest-rate cuts this year.
Reporting by Purvi Agarwal in Bengaluru; Editing by Shweta Agarwal
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