Canada’s main stock index rebounded on Wednesday from a 10-month low hit in the previous session as energy and mining shares rallied on the back of higher commodity prices.
At 9:48 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 147.28 points, or 0.74%, at 20,037.34, on course to snap four sessions of losses.
The energy sector climbed 3.5% as oil prices recovered after a 10% plunge in the past two sessions, buoyed by supply worries and expectations that Beijing would provide more economic stimulus after China’s factory-gate inflation eased.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 2.4% due to stronger bullion and copper prices.
Endeavour Silver Corp jumped 17.1% and was the top gainer on the benchmark index following upbeat first-quarter results.
The gains were, however, kept in check by U.S. data showing that the consumer price index - the Federal Reserve’s preferred inflation gauge - rose more than expected last month.
That added to bets of aggressive policy tightening by the U.S. central bank, pushing up yields on the benchmark U.S. 10-year Treasury note.
“Canadian and U.S. economies are closely linked. Therefore, I think you can expect the market to use the U.S. release as a pointer for the Canadian figure next week,” said Stuart Cole, head macro economist at Equiti Capital.
On Tuesday, the Canadian benchmark index fell to its lowest level in 10 months, taking its losses since the March 29 closing record high to nearly 10%. A correction is confirmed when an index closes 10% or more below its record closing level.
Among other sectors, technology and cyclical stocks both fell nearly 1.5%, while the financials sector slipped 0.1%.
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