Canada’s main stock index reversed course to hover around a two-week high, lifted by energy and technology stocks, while Bank of Montreal slipped after the Canadian lender missed quarterly profit estimates.
At 10:19 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 131.97 points, or 0.66%, at 20,157.11, after it hit a two-week high in the previous session. The index fell 0.05% in early trading.
Rate-sensitive technology stocks rose over 1%, leading sectoral gains, while energy sector climbed 0.6%, tracking crude prices.
Heavily-weighted financial stocks gained 0.5%, after declining in early trade.
Bank of Nova Scotia’s shares rose 1.6% as investors were encouraged by a 12.7% improvement in the lender’s capital position and better expense management, even as the fourth-largest Canadian bank missed quarterly profit estimates.
Gains were limited by a more than 1% drop in Bank of Montreal’s shares after the country’s third-largest bank missed analysts’ estimates for quarterly profit as it set aside more funds to cover bad loans. The stock was the worst performer on the benchmark index.
Banks are facing a “systemic challenge” as the rapidly rising interest rates are putting pressure on the consumers, resulting in banks making more extensive loan loss provisioning, Philip Petursson, chief investment strategist at IG Wealth Management, said.
“This is going to be a trend and perhaps continue a little bit more aggressively into 2024.”
Across the border, U.S. job openings fell for a third straight month in July as the labor market gradually cools, but remained tight.
Among other economic data set for release this week include Canada’s second-quarter GDP, U.S. personal consumption expenditures price index and non-farm payrolls.
Canada’s second-quarter GDP report is due on Friday and will likely show a sharp slowdown in economic growth, a Reuters poll of economists showed.
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