S&P/TSX Composite Index advances on Monday with help from commodity stocks


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Gains in the energy and mining sectors helped Canada’s main stock index edge up Monday amid rising prices for commodities like oil, natural gas and gold.

In the first day of trading after the Easter long weekend, the S&P/TSX Composite Index closed up 22.71 points at 21,878.41 as investors turned to commodities against fears of war in Ukraine and the ever-present threat posed by inflation.

Energy stocks were the big winners, with the S&P/TSX Capped Energy Index up 6.88 points or 2.89%, while the S&P/TSX Capped Materials Index rose 3, 19 points or 0.77%.

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The S&P/TSX Healthcare Index lost the most in the day’s trading, losing 2.03 points or 5.08% as investors turned away from riskier bets such as cannabis stocks.

Mona Mahajan, senior investment strategist at Edward Jones, said the market continues to react to the Bank of Canada’s second interest rate hike in 2022 (a 50 basis point hike announced last week) as well as to expectations of upcoming rate hikes by the US federal government. Reserve.

“In fact, if you see what the market odds are, they’re predicting a 50 basis point rate hike in May, June and July for the Federal Reserve, and I think at least another 50 basis point hike basis by the Bank of Canada as well,” Mahajan said. “Generally, I would say this market is bracing for an aggressive central bank move.”

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In New York, the Dow Jones industrial average was down 39.54 points to 34,411.69. The S&P 500 index fell 0.90 points to 4,391.69, while the Nasdaq composite fell 18.72 points to 13,332.36.

Year-to-date, the TSX has outperformed U.S. markets, Mahajan said, largely because it has more exposure to commodity stocks. On Monday, the June crude contract was up US$1.23 at US$107.61 a barrel and the May natural gas contract was up 52 cents US$7.82 per mmBTU.

The June gold contract rose US$11.50 to US$1,986.40 per ounce and the May copper contract rose 8 cents to US$4.80 per pound.

“The TSX has been one of the few markets to be up year-to-date . . . I think the higher weighting in energy and materials has really helped that market,” Mahajan said.

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She added that it was interesting that concerns about rate hikes and their potential impact on the economy continued to weigh on markets, despite a host of other positive economic indicators recently.

“Whether it’s unemployment, consumer confidence or even earnings, the United States and Canada came out roughly in line or even slightly ahead of expectations,” she said.

There will be a lot to watch for Canadian investors in the coming week, Mahajan added, as Statistics Canada is expected to release the Consumer Price Index (CPI) figure for March on Wednesday. . The CPI measures the change in price of a fixed basket of consumer goods in Canada and is considered a good measure of inflation. Some forecasts call for the CPI in March to rise as much as 6.2% year-on-year, Mahajan said.

This week, Statistics Canada is also expected to release its latest retail sales data.

“It will be quite telling in terms of consumer health, which of course is quite important for the health of the economy,” Mahajan said. “So I think those two in particular this week we’ll be keeping an eye out for.”

The Canadian dollar was trading at 79.25 cents US against 79.36 cents US on Thursday.

This report from The Canadian Press was first published on April 18, 2022.

Companies in this story: (TSX:GSPTSE, TSX:CADUSDX)



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