Canada’s main stock index was flat on Tuesday, as gains in materials were offset by losses in communications, while investors looked forward to more earnings this week.
At 9:53 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 9.59 points, or 0.05%, at 20,572.53.
The materials sector, which houses Canada’s major mining firms, rose 1.0% as prices of most base metals rallied after China’s top leaders said on Monday they would step up economic policy adjustments, focusing on expanding domestic demand, boosting confidence and preventing risks.
“Usually a stronger economy out of China is a good thing for our (Canadian) markets because we pull out of the ground many of the things that China needs,” said Allan Small, senior investment adviser of Allan Small Financial Group with iA Private Wealth.
“Even though the reality is we may not be exporting as much to China as you would think, just overall higher commodity prices benefits our economy here in Canada.”
Canadian earnings season would pick up pace this week, with railroad operator Canadian National Railway, telecom firm Rogers Communications and mining firm Teck Resources among the major companies reporting quarterly results during the period.
The capped communications sector slipped 0.8% on Tuesday, dragged by a 1.3% fall in Quebecor — the biggest percentage loser on the index. The telecom stock had gained nearly 2% in the previous session.
Exchange operator TMX Group slipped 3.1% after brokerage RBC downgraded the stock to “sector perform” from “outperform”.
TC Energy lost 1.3% after CIBC downgraded the stock to “neutral” from “outperformer”.
Volatile commodity prices have kept gains on the TSX in check, with the Canadian benchmark up only 6.2% for the year compared with an 18.8% rise in the U.S. S&P 500 index.
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