Canada’s main stock index edged higher on Monday, aided by gains in resources-linked shares and an upbeat mood in global equities, although sentiment remained fragile amid recession fears.
At 9:46 a.m. ET (1346 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 15.87 points, or 0.08%, at 19,078.78, extending the previous session’s gains.
Meanwhile, global markets rose, as oil prices came off their peaks, improving sentiment and tempering concerns of prolonged inflation.
“Today’s pick up in risk appetite is simply that maybe rates will not be hiked as far as thought previously,” said Stuart Cole, head macro economist at Equiti Capital.
“There is also talk about a rebalancing by large institutional investors taking place as we reach end H1, moving back into stocks on the back of this perceived brighter outlook and reduced worry about recession.”
The energy sector climbed 0.7%, with Vermilion Energy Inc, up 4.6%, jumping to the top of the index after brokerage Scotiabank upgraded its rating of the energy producer’s stock.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.6% tracking stronger bullion prices.
Further gains were limited by a nearly 1.4% drop in both healthcare and technology sectors.
Global markets have been rattled in recent weeks as prospects of aggressive policy tightening by central banks to tackle soaring inflation fanned recession fears.
Meanwhile, Canada’s finance minister, Chrystia Freeland, said on Sunday that the country still has a path to a “soft landing,” where it could stabilize economically after the blow by the COVID-19 pandemic, without facing a severe recession that many fear, CBC News reported.
In company news, Rogers Communications Inc, Shaw Communications Inc and Canada’s competition bureau on Friday agreed to start a mediation process to overcome the agency’s antitrust issues posed by Rogers’ C$20 billion ($15.5 billion) acquisition of Shaw. Shares of Rogers and Shaw were down 0.8% and 0.1%, respectively.
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