TSX rebounds after 'lousy' April, led by resource shares

·2-min read
The facade of the original Toronto Stock Exchange building is seen in Toronto

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index rose on Tuesday as a rally in resource and financial shares helped the market claw back some recent declines ahead of a hotly anticipated Federal Reserve interest rate announcement.

The Toronto Stock Exchange's S&P/TSX composite index ended up 213.06 points, or 1%, at 20,905.28.

"We are seeing a bounce after a pretty lousy April," said Angelo Kourkafas, investment strategist at Edward Jones.

April was the worst monthly performance for the index in over two years as concern rose globally about soaring inflation and rising interest rates. On Monday, the index touched its lowest intraday level in more than two months at 20,456.80

Wall Street's main indexes also rose on Tuesday as the Fed kicked off its two-day policy meeting. Still, investors were cautious about the central bank's ability to tame inflation without impeding growth.

"The probability of a recession still appears low at the moment, but at the same time unless it becomes more clear that inflation is peaking and the yield backup that we have seen stabilizes it might be a little hard to see a very rapid bounce form here," Kourkafas said.

The energy sector climbed 3.9% despite lower oil prices, with Paramount Resources and MEG Energy Corp leading gains following upbeat corporate earnings.

Oil settled 2.6% lower at $102.41 a barrel on worries that COVID-19 lockdowns in China will depress demand.

The materials sector, which includes precious and base metals miners and fertilizer companies, added 2.3% as SSR Mining Inc jumped 7.5% after the release of first-quarter results.

Heavily weighted financial shares rose 0.9%, while technology ended nearly 1% higher.

Among stocks that lost ground was Restaurant Brands International Inc. The owner of Burger King and Tim Hortons fell 3.5% despite beating estimates for quarterly results.

(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Richard Chang)

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