TSX boosted by tech, commodities gains

  • Canadian manufacturing activity slows for fourth straight month
  • Bank stocks fall after CIBC, BMO and TD report results

Dec 1 (Reuters) – Canada’s main stock index rose for a third straight session on Thursday, supported by technology and commodity-linked shares, while investors digested mixed manufacturing data.

At 10:20AM ET (15:20GMT), the S&P/TSX on the Toronto Stock Exchange was up 77.24 points, or 0.38%, to hit a near six-month high.

The energy (.SPTTEN) and materials (.GSPTTMT) sectors rose 0.6% to 2.3% as hopes of OPEC+ production cuts underpinned crude prices, while expectations of a slowdown in U.S. rate hikes added to optimism.

The tech sector (.SPTTTK) rose 1.7% as Canadian government bond yields fell along with U.S. Treasury yields.

Data showed Canadian manufacturing activity weakened for a fourth straight month in November as fears of a recession sapped demand, but indicators of the pace of contraction and inflationary pressures eased.

Meanwhile, financials (.SPTTFS) fell 0.4%. Canadian Imperial Bank of Commerce ( CM.TO ) and Bank of Montreal ( BMO.TO ) fell 5.3 percent and 0.6 percent, respectively, after the lenders reported a drop in fourth-quarter profits as banks made more provisions for potential loan defaults gold.

Canada Dominion Bank (TD.TO ) was a bright spot, rising 1.5% after a fourth-quarter profit surge.

“Earnings in the Canadian banking sector generally came in slightly below expectations,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

“But one thing that is consistent is that core banking is doing quite well, while capital markets are weak, which is to be expected given the market conditions.”

Economists polled by Reuters expect the Bank of Canada to raise interest rates by another 25 basis points next week.

“Historically, central banks have stopped raising rates until they at least beat CPI, and the prevailing feeling on Wall Street is that rate hikes may stop sometime in early 2023,” Cieszynski added.

Reporting by Johann M Cherian in Bengaluru; Editing by Sriraj Kalluvila

Our Standards: The Thomson Reuters Trust Principles.

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