Toronto stock index gains as U.S. earnings boost sentiment

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

By Nichola Saminather

(Reuters) - Canada's main stock index posted its fourth straight day of gains on Wednesday alongside U.S. stocks, which were boosted by strong earnings, while data showed inflation accelerated again in June but not as sharply as expected.

The Toronto Stock Exchange's S&P/TSX composite index closed up 82.96 points, or 0.44%, at 19,020.67.

Healthcare stocks jumped 6.4% and the technology group gained 2.9%, with cannabis companies Canopy Growth Corp, Tilray Brands and Cronos Group and technology firms Shopify and Lightspeed Commerce among the biggest gainers.

"Our market moves more with the U.S. and what we've been getting out of the U.S. is a pretty good start to corporate earnings season," said Allan Small, senior investment adviser of the Allan Small Financial Group with iA Private Wealth.

"They are telling us that things have not slowed down yet and consumers are hanging in a lot better than what was anticipated," he added. "And it's been reflected both in U.S. and Canadian markets."

Wall Street was also up for the fourth consecutive session, boosted by a positive outlook from Netflix, in an earnings season in which over three-quarters of firms have beaten analysts' expectations.

Data earlier in the day showed Canada's annual inflation rate accelerated to 8.1% last month, up from 7.7% in May, mainly on rising gasoline prices.

(Graphic: Canada's annual inflation rate accelerates to 8.1% in June, highest in 39 years:

But the figure was slightly below market expectations and eased fears of another aggressive move from the central bank after it raised interest rates by 100 basis points last week in a surprise move.

While expectations for a 50-basis-point hike increased slightly after the data, traders were now seeing a smaller chance of a 75-basis-point raise.[IRPR]

The rate-sensitive financials sector gained 0.5%.

The positive sentiment also boosted Canadian energy stocks 1.4% despite a drop in oil prices after U.S. government data showed lower gasoline demand during the peak summer driving season. U.S. crude was down 1.9%.

Improved risk appetite led to a decline in safe-haven gold prices, with the materials group in Canada falling alongside to be the day's biggest decliner.

It lost 1.6%, as prices of gold miners including First Quantum Minerals, Wesdome Gold Mines and Wheaton Precious Metals all fell. Spot gold was down 0.9% at 2018 GMT.

(Reporting by Nichola Saminather in Toronto; Additional reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Aditya Soni and Grant McCool)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting