Materials sector helps lift TSX to three-week high
By Fergal Smith
(Reuters) -Canada's main stock index climbed on Tuesday to a three-week high, led by gains for gold mining shares, as the recent jump in bond yields and data showing a surprise cooling in Canadian inflation raised hopes that central banks would stay sidelined.
The Toronto Stock Exchange's S&P/TSX composite index ended up 72 points, or 0.4%, at 19,692.80, its highest closing level since Sept. 25.
"Just given the spike in yields and the geopolitical uncertainty there is some expectation that the central banks might be on pause for the next little while," said Elvis Picardo, portfolio manager at Luft Financial, iA Private Wealth
"That's contributing to some positive market sentiment even though volatility is high at the moment."
Money markets see an 84% chance that the Bank of Canada will leave its benchmark interest rate on hold at a 22-year high of 5% next week, up from 57% before domestic data that showed inflation slowed to an annual rate of 3.8% in September.
The materials group, which includes precious and base metals miners and fertilizer companies, added 1.9 percent as the price of gold moved higher.
"Now that crypto currencies are no longer the favored safe-haven asset, gold is getting back to its long-time status of a safe-haven," Picardo said.
Energy added 0.5% as oil settled unchanged at $86.66 a barrel. Investors waited to see whether U.S. diplomatic efforts and a trip by President Joe Biden to Israel will prevent the conflict in the Middle East from widening.
Technology advanced 0.5% and consumer discretionary ended up 0.9%. Gains for financials were more modest, with the heavily-weighted sector adding 0.1%.
Canada will closely monitor how major banks are complying with mortgage rules designed to provide relief to people struggling to make payments, Finance Minister Chrystia Freeland told a press conference.
(Reporting by Fergal Smith in Toronto and Shubham Batra and Khushi Singh in Bengaluru; Editing by Shweta Agarwal, Pooja Desai and Alistair Bell)
