A rally in energy and cannabis firms put Canada’s main stock index on course for its fourth straight session of gains on Wednesday, even as the wider sentiment remained cautious ahead of minutes from the U.S. Federal Reserve’s latest meeting.
At 9:45 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 102.71 points, or 0.51%, at 20,388.91.
The energy sector rose 1.2%, riding on a jump in oil prices due to tight supplies and the prospect of rising demand from the summer driving season in the United States.
Healthcare stocks advanced 1.2%, with pot producers Canopy Growth Corp, Tilray Brands Inc , Aurora Cannabis Inc all up between 1.5% and 2.48%.
The financials sector gained 0.7%, as Bank of Nova Scotia and Bank of Montreal kicked off second-quarter earnings for the sector with better-than-expected profits.
Bank of Nova Scotia rose 3.1%, while Bank of Montreal was down 0.4%.
“We have had a little bit of a positive surprise. There was some concern with the banks, whether they would be hurt by the weakness in the Canadian consumer, but that does not seem to be the case as of yet,” said Gregory Taylor, portfolio manager at Purpose Investments.
Investor focus will be on the Fed minutes, which could offer hints on how aggressively the central bank will raise interest rates to tackle unruly inflation.
While worries about monetary policy tightening have weighed on equities this year, the benchmark Canadian index has fared better than peers thanks to its heavy exposure to rising commodity prices. The index is down nearly 4% so far in 2022.
On Wednesday, the materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.3% due to weakness in gold and industrial metal prices.