Canada’s main stock index climbed on Thursday, led by technology shares, as investor confidence grew that the U.S. Federal Reserve and the Bank of Canada would maintain their interest rate cut trajectories.
At 10:09 a.m. ET, Toronto’s S&P/TSX composite index was up 0.2% at 30,676.46 points, building on the record close in the previous session.
Information Technology stocks advanced 1.4% after the world’s biggest producer of advanced chips, TSMC raised its revenue forecast on strong AI spending.
Materials stocks also rose 1% as gold hit a record high for the fourth straight session.
“The Canadian stock market is in a sweet spot with precious metals experiencing a tremendous surge and gold miners occupying a significant position within the TSX,” said Matt Skipp, President of SW8 Asset Management.
Bank of Canada Governor Tiff Macklem is set to speak on Canada’s economic outlook at 13:30 ET. Market participants price in 63% chances of a 25-basis-point rate cut at the October 29 policy meeting.
Despite last week’s unexpectedly robust jobs report, many analysts believe the central bank remains on an easing trajectory, which might proceed slower.
Economic data on the day showed Canadian home sales fell 1.7% in September from August.
“I expect rates to go lower because the Canadian economy is over-leveraged to real estate, residential housing and construction, and it’s weak,” Skipp said.
Fed’s Christopher Waller said on Thursday he’s on board with another interest rate cut at the U.S. central bank’s policy meeting later this month.
On the downside, the energy sector retreated 0.6%, even as oil prices held steady while traders positioned themselves for a potential suspension of India’s Russian oil imports.
Heavyweight financial stocks SPTTFS also declined 0.7% after rallying over the previous two sessions following encouraging quarterly results from U.S. banks.
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