Canada’s main stock index rose on Wednesday after the Bank of Canada kept interest rates unchanged, while signs of cooling inflation in the U.S. boosted investor sentiment on hopes of a dovish Federal Reserve.
At 10:17 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 155.98 points, or 0.76%, at 20,577.83.
The Bank of Canada kept its key overnight interest rate on hold at 4.50% as expected and raised its growth forecast for this year to 1.4% from 1.0% in January, while dropping language that had warned of a possible recession.
“The decision itself really was no surprise,” said Douglas Porter, chief economist at BMO Capital Markets.
“The comment that recent data is reinforcing the governing council’s confidence that inflation will continue to decline in the next few months is somewhat beneficial for equities.”
Across the border, data showed that U.S. headline CPI cooled faster than expected in March, raising hopes that the Federal Reserve could hit pause on its interest rate hiking cycle soon.
Canadian government bond yields were lower across the curve, tracking the move in U.S. Treasuries. The 10-year eased to 2.892%.
Strength in crude and gold prices against the dollar lifted the energy sector and the materials sector, up 0.7% and 0.8%, respectively.
The rate-sensitive technology sector gained 1.7%, led by a 5.5% rise in shares of Shopify Inc on JMP Securities’ rating upgrade.
The financials sector, a heavyweight on the TSX, advanced 0.6%.
The TSX had gained on the previous three days as well, helped by rising crude and spot gold prices.
Among other major movers, Brookfield Infrastructure fell 2.7% after the company said it would buy intermodal container lessor Triton International Ltd for about $4.7 billion.
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