TSX eyes best day in three weeks on surge in commodity prices

·2-min read
FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto

By Aniruddha Ghosh

(Reuters) - Canada's main stock index pared some of its weekly losses on Friday as a surge in energy and material stocks was complimented by U.S. jobs data that could ease pressure on the Federal Reserve to deliver another big rate hike.

At 10:32 a.m. ET (1432 GMT), the Toronto Stock Exchange's S&P/TSX composite index gained 258.87 points, or 1.35%, to 19,401.59.

The TSX broke a five-day losing streak and was on track for its best day since Aug. 10. Still, the benchmark index looked set for its worst week since June.

U.S. stocks rose after data showed wage growth slowed in the country while unemployment rose, renewing hopes the Federal Reserve would be less aggressive in raising interest rates. [.N]

"The narrative shifted from hike and cut to hike and pause and we've seen bond markets price that outcome over the course of the month but the equity markets didn't and that's why we saw this pull back over the last five days," said Angelo Kourkafas, investment strategist at Edward Jones.

"The markets could be range bound over the next week or so."

Focus is on the Bank of Canada's policy meeting next week amid signs the economy might be cooling more quickly than expected. Traders are pricing in an 85% chance of a 75-basis- point interest rate hike at the meeting.

The energy sector climbed 2.8% as oil prices rose on expectations that OPEC+ will discuss output cuts at a meeting on Sept. 5, though concern over China's COVID-19 curbs and weakness in the global economy continued to limit gains. [O/R]

The materials sector, which includes precious and base metals miners and fertilizer companies, added 2.4% as gold rose above the important psychological level of $1,700 as the dollar paused while. [GOL/] [MET/L]

The rate sensitive financials sector gained 1.4%, while the industrials sector rose 0.6%.

(Reporting by Aniruddha Ghosh in Bengaluru; Editing by Shinjini Ganguli and Aditya SOni)