Canada’s main stock index rose on Tuesday, boosted by gains in financial and energy stocks, as an in-line reading of US inflation data bolstered hopes of smaller interest rate hikes by the Federal Reserve.
By 10:19 a.m. ET (1419 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 178.61 points, or 0.91%, at 19,767.51.
US consumer prices increased in February amid sticky rental costs, but were largely in line with expectations. Economists are divided on whether rising inflation will be enough to push the Fed to hike interest rates again next week after the failure of two regional banks.
Financial stocks around the world have been under immense selling pressure after the collapse of Silicon Valley Bank (SVB) and Signature Bank.
“We’re basically seeing Canadian markets rebounding, alongside the US market,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “Canadian markets do tend to track other equity markets around the world.”
All three major Wall Street indexes were trading higher.
Mirroring the tech-heavy US Nasdaq, Canada’s technology sector also gained 1.2%.
Tech stocks such as Shopify Inc gained 2.8%.
Heavyweight financials, the Canadian index’s biggest sector, rose 1.1%, rebounding from a 2% decline in the previous session.
The sector tracked its best day in two months after three days of losses.
Energy stocks gained 1.3%, bouncing back from a 4.6% drop in the previous session.
Back home, Canadian factory sales grew 4.1% in January from December on higher sales for petroleum and coal products, as well as motor vehicles.
Among individual stocks, Vermilion Energy Inc gained 5.9% after J.P.Morgan upgraded the energy producer to “overweight” from “neutral”.
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