Canada’s main stock index rose on Monday after last week’s rout aided by gains in cyclical and financial shares, although trading volumes stayed low with U.S. markets closed for a holiday.
At 9:39 a.m. ET (13:39 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 111.6 points, or 0.59%, at 19,042.08.
Global stocks on Monday also chalked up modest gains, with U.S. markets closed for Juneteenth National Independence Day.
The financials sector gained 0.5%, while consumer discretionary shares rose 1.23%.
“Investors sold riskier assets on Friday amid recession fears, triggering a major decline. On Monday though, the Canadian market is likely to recover slightly because global stocks are recording modest gains,” said by Kunal Sawhney, CEO, Kalkine Group.
“But since the U.S markets will remain closed due to Juneteenth, we may not see massive trading activity in Canada.”
The index was recovering after a brutal selloff last week, where it posted it biggest weekly dip since March 2020, on fears that aggressive interest rate hikes from major central banks could trigger a recession.
Investors now await domestic inflation figures due on Wednesday and it will present a clear picture of the economic situation in Canada Sawhney said.
The risk of inflation becoming entrenched in Canada’s economy is growing, say analysts, as surging prices for gas and other highly visible consumer items undercut efforts by the Bank of Canada to keep expectations for price increases in check.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.3%, while heavyweight the energy sector climbed 1.3%.
In company news, shares of Fairfax Financial Holdings gained 1.0% after it said it will sell its global pet insurance operations to JAB Holding, the private investment company of Germany’s Reimann family, in a $1.4 billion deal.
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