TSX Up Sharply As Bay Street Cheers BoC Rate Decision

(RTTNews) - The Canadian market is up firmly in positive territory a little past noon on Wednesday, extending its morning gains after the Bank of Canada announced a less than expected hike in interest rates.

Buying is so widespread that all the sectoral indices are up in positive territory. Communications, healthcare, materials, energy and industrials shares are up with strong gains.

The benchmark S&P/TSX Composite Index is up 323.50 points or 1.7% at 19,420.51 a little past noon.

Shaw Communications (SJR.B.TO), up nearly 10%, tops the list of gainers in the communications sector. Rogers Communications (RCI.B.TO) is climbing 6.3%.

In the healthcare sector, Canopy Growth Corp (WEED.TO) is rising nearly 10%. Bausch Health Companies (BHC.TO) is up 4.5%, while Tilray Inc (TLRY.TO) is gaining 2.7%.

Among materials shares, Hudbay Minerals (HBM.TO), Lundin Mining (LUN.TO), Capstone Mining (CS.TO) and Turquoise Hill Resources (TRQ.TO) are up 8 to 13%.

Precision Drilling Corp (PD.TO), up 8.2%, is the top gainer in the energy sector. Spartan Delta Corp (SDE.TO), Athabasca Oil Corp (ATH.TO), Paramount Resources (POU.TO), Nuvista Energy (NVA.TO), Tamarack Valley Energy (TVE.TO), Baytex Energy (BTE.TO) and Tourmaline Oil Corp (TOU.TO) are gaining 3 to 7%.

The Canadian central bank, citing elevated inflation, announced its sixth consecutive interest rate increase of the year this morning. However, the hike, at 50 basis points, turned out to be less than economists' expectations of a 75 basis point increase.

The Canadian central bank said the effects of its recent rate hikes are becoming evident in interest-sensitive areas of the economy, with housing activity retreating sharply and spending by households and businesses softening.

"Economic growth is expected to stall through the end of this year and the first half of next year as the effects of higher interest rates spread through the economy," the Bank of Canada said.

The bank now expects Canadian GDP growth to slow from 3.25% this year to just under 1% next year and 2% in 2024.

Although consumer price inflation has slowed in the past three months due to a fall in gasoline prices, the central bank has cautioned price pressures remain broadly based. The bank also said that interest rates will need to rise further d ue to elevated inflation and inflation expectations.

The bank also reiterated its commitment to restore price stability for Canadians and said it will continue to take action as required to achieve the 2% inflation target.