Canada’s main stock index continued its record-setting run on Friday, set to extend its string of weekly gains two days after interest rate cuts by the U.S. and Canadian central banks.
Toronto’s S&P/TSX composite index added 0.5% to 29,602.19 points by 10:07 ET, after hitting a record intra-day high earlier in the session. The index was set for a seventh-consecutive week of gains, its longest such streak in over a year.
The BoC reduced its key policy rate to a three-year low of 2.5% on Wednesday, saying it was prepared for further cuts if risks to the economy rose.
Retail sales data from July showed a 0.8% drop as widely anticipated, but an advanced indicator pointed to retail sales growth rebounding to 1% in August.
“Canadian retail sales were disappointing which has continued a series of negative economic numbers for Canada, and is going to keep the pressure on the Bank of Canada for cutting rates,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
Gold mining stocks led gains on the day, rising 3.1%, tracking bullion prices.
Barrick Gold Mining rose 6.3% while Kinross Gold and Endeavour Mining added over 3% each.
Energy stocks were the laggards on the day, dropping 1.7% while most indexes were in the green.
Among other stocks, mining company Orla Mining dropped 7.1% to $14.18 after gold miner Newmont said it sold its entire stake for $439 million.
Toronto Stock Exchange’s index currently trades at a 12-month forward price-earning ratio of 16.45, its highest level since May 2021, according to data from LSEG Datastream.
“Valuations have certainly gotten stretched. This isn’t an issue specific to Canada. It’s more a case of the trend is your friend till it ends,” Cieszynski said.
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