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PrintCANADA STOCKS-TSX touches record high on bets of larger Fed rate cut
BY Reuters | ECONOMIC | 09/16/24 11:04 AM EDT(Updated at 10:11 a.m. ET/ 1411 GMT)
By Nikhil Sharma
Sept 16 (Reuters) - Canada's main stock index edged up to an all-time high on Monday, driven by gains in healthcare shares, while investors bet on a heftier U.S. interest-rate cut later this week.
The Toronto Stock Exchange's S&P/TSX composite index was up 54.98 points, or 0.23%, at 23,623.63. It had notched record-high closing levels in the past two sessions.
At least nine sectors gained, led by a near 1% rise in
healthcare. Bausch Health Companies
The domestic index pared initial gains, however, taking cues from Wall Street after the tech-heavy Nasdaq registered an over 1% decline.
Odds of a 50-basis-point rate cut at the end of the U.S. Federal Reserve's two-day meeting on Wednesday have risen to 63%, from 30% last week, according to the CME's FedWatch tool.
"It's probably the first cut of many to come" and that gives a boost to the resource-heavy Canadian market for a number of reasons, said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.
Zero-yield gold and other dollar-denominated commodities tend to benefit from lower U.S. interest rates. Crude oil and gold are among Canada's top exports.
The Bank of Canada has already cut its interest rates three consecutive times this year, bringing the policy rates down from a two-decade high of 5% to 4.25%.
On the data front, Canadian factory sales grew by 1.4% in June from May on higher sales of petroleum and coal products, as well as chemical products.
The TSX's financials sector climbed 0.4%, while energy stocks rose 0.35%.
West Texas Intermediate crude futures rose 2.51% and Brent crude gained 1.98%.
The TSX has added 12.7% for the year.
(Reporting by Nikhil Sharma in Bengaluru; Editing by Leroy Leo and Devika Syamnath)
