Canadian Market Recovers After Mild Setback

RTTNews | 623 days ago
Canadian Market Recovers After Mild Setback

(RTTNews) - Canadian stocks have recovered after a weak start and are moderately higher in later morning trades on Wednesday, supported by gains in industrials and consumer staples sectors.

The market drifted lower earlier in the session, after the Bank of Canada decided to leave interest rates unchanged, but warned that it is prepared to raise policy rate further if needed as inflationary risks have increased.

The benchmark S&P/TSX Composite Index is up 70.40 points or 0.37% at 19,056.89 about a quarter to noon. The index, which dropped to 18,922.40 earlier this morning, climbed to 19,090.76 before paring some gains.

In the industrials sector, Waste Connection (WCN.TO) is up 2.7%. The company announced on Tuesday that it has achieved its emissions reduction target and has confirmed its commitment to invest approximately $200 million in renewable natural gas facilities expected on line by 2026.

Canadian Pacific Kansas City (CP.TO) is gaining nearly 2.5%. Canadian National Railway (CNR.TO), TFI International (TFII.TO), Bombardier Inc (BBD.B.TO) and Badger Infrastructure (BDGI.TO) are also sharply higher.

Consumer staples shares Maple Leaf Foods (MFI.TO), Alimentation Couche-Tard (ATD.TO), Empire Company (EMP.A.TO), Weston George (WN.TO), Metro Inc (MRU.TO), Loblaw (L.TO) and The North West Company (NWC.TO) are gaining 1 to 2.3%.

Nuvei Corporation (NVEI.TO) is declining more than 8%. Shopify Inc (SHOP.TO) is down 4%. Docebo Inc (DCBO.TO) is down 3%. Newmont Corporation (NGT.TO) and Cargojet (CJT.TO) are also notably lower.

Teck Resources (TECK.A.TO) is soaring 11.5%. Sprott Inc (SII.TO), Fairfax Financial Holdings (FFH.TO) and Cameco Corporation (CCO.TO) are up 2.4 to 3.7%.

As widely expected, the Canadian central bank announced this morning that it has decided to leave interest rates unchanged, holding the target for the overnight rate at 5%, with the bank rate at 5.25% and the deposit rate at 5%.

The central bank attributed the decision to clearer signs that monetary policy is moderating spending and relieving price pressures. However, the BoC said its Governing Council is concerned that progress towards price stability is slow and inflationary risks have increased and is prepared to raise the policy rate further if needed.

"Governing Council wants to see downward momentum in core inflation, and continues to be focused on the balance between demand and supply in the economy, inflation expectations, wage growth and corporate pricing behavior," the BoC said.

The bank's statement also noted the global economy is slowing and growth is forecast to moderate further as past increases in policy rates and the recent surge in global bond yields weigh on demand.

The BoC forecast global GDP growth of 2.9% this year, 2.3% in 2024 and 2.6% in 2025. With regard to inflation, the BoC said consumer price inflation is expected to average about 3.5% through the middle of next year before gradually easing to 2% in 2025.

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