Canada’s main stock index rose on Tuesday, with energy and materials stocks amongst top gainers tracking higher oil and metal prices as traders returned after a long weekend.
At 10:04 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 31.28 points, or 0.16%, at 20,186.57, touching a six-week high.
The energy sector gained 0.8% tracking higher crude prices as markets weighed supply cuts for August by top exporters Saudi Arabia and Russia against a weak global economic outlook.
The materials sector, which houses Canada’s major precious metal miners, rose 0.7% as gold prices gained momentum.
Canadian miners Teck Resources, Neo Performance Materials, Avalon Advanced Materials gained between 0.2% - 12% after China’s decision on Monday to restrict exports of some metals widely used in semiconductors and electric vehicles.
Meanwhile, data showed contraction in Canada’s manufacturing sector deepened slightly in June as an uncertain economic outlook weighed on both domestic and foreign demand.
The Bank of Canada’s decision on policy tightening is due next week, where traders are split between another 25-basis point hike and the central bank keeping rates steady.
“One would hope that the BoC is seeing a slowdown on the manufacturing side of things, even though on the services side, they’re not,” said Allan Small, senior investment adviser of Allan Small Financial Group with iA Private Wealth.
“That is the problem for the BoC … how much do they increase rates to bring down that stubborn core and services inflation.”
Trading is expected to be light as most of Wall Street was closed for an Independence Day holiday. Canadian markets were closed for the Canada Day holiday on Monday.
The TSX eked out a meager quarterly gain in the April-June period, pressured by volatile commodity prices on an uncertain outlook in top commodities consumer China.
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