Canadian Market Modestly Higher After BoC Holds Rates Unchanged

(RTTNews) - After opening modestly higher and advancing further in early trades, Canadian stocks pared some gains Wednesday morning after the Bank of Canada held its key interest rate unchanged and expressed concerns about risks to the outlook for inflation.

Citing the outlook for the economy and inflation, the Bank of Canada on Wednesday announced its widely expected decision to leave interest rates unchanged.

The Bank of Canada held its target for the overnight rate at 5%, with the bank rate at 5.25% and the deposit rate at 5%. The Canadian central bank is also continuing its policy of quantitative tightening.

The decision to leave rates unchanged comes as the Bank of Canada said its Governing Council is "still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation."

The Governing Council wants to see further and sustained easing in core inflation and remains resolute in its commitment to restoring price stability for Canadians, the bank said.

The bank expects consumer price inflation to remain close to 3% during the first half of this year before gradually easing, returning to the 2% target in 2025.

"The economy has stalled since the middle of 2023 and growth will likely remain close to zero through the first quarter of 2024," the bank said.

The benchmark S&P/TSX Composite Index, which climbed to 21,161.22 in early trades, dropped to 21,049.62 before rising to 21,108.51, gaining 77.76 points or 0.37% at 21,112.35.

Technology stocks Hut 8 Corp (HUT.TO) and Tecsys Inc (TCS.TO) are gaining 2.7% and 2.3%, respectively. Descartes Systems Group (DSG.TO), Kinaxis Inc (KXS.TO), Celestica Inc (CLS.TO), Coveo Solutions (CVO.TO), Shopify Inc (SHOP.TO) and Docebo Inc (DCBO.TO) are up 1 to 2%.

Energy stocks Shawcor (MATR.TO), Precision Drilling Corporation (PD.TO), MEG Energy Corp (MEG.TO), Birchcliff Energy (BIR.TO), Headwater Exploration (HWX.TO), Tamarack Valley Energy (TVE.TO), Secure Energy Services (SES.TO), Kelt Exploration (KEL.TO), Arc Resources (ARX.TO) and Pason Systems (PSI.TO) are up 1.5 to 3.4%.

Spin Master Corp (TOY.TO) is surging 8%. Teck Resources (TECK.A.TO) is climbing 4.2%, MTY Food Group (MTY.TO) is advancing 3.5%, Bank of Montreal (BMO.TO) is rising 1.3% and Thomson Reuters Corporation (TRI.TO) is up 1.2%.

BlackBerry (BB.TO) is plunging more than 17% on huge volumes.. B2Gold Corp (BTO.TO) is down 10%. Kinross Gold Corporation (K.TO) and Barrick Gold Corporation (ABX.TO) are down 2.2% and 1.7%, respectively.

Agnico Eagle Mines (AEM.TO), Canadian National Railway (CNR.TO), Aritzia Inc (ATZ.TO), ATCO Ltd (ACO.X.TO), Dollarama Inc (DOL.TO), Wheaton Precious Metals (WPM.TO), Franco-Nevada Corporation (FNV.TO) and Cogeco Inc (CGO.TO) are down 1.3 to 2%.