CANADA STOCKS-TSX rallies to near two-week high as rate hike worries ebb
(Adds comments, updates numbers)
By Shashwat Chauhan
Oct 4 (Reuters) - Canada's main stock index surged in a broad-based rally on Tuesday, led by rate-sensitive technology and energy stocks, as a pause in bond yields increased appetite for riskier equities after a selloff in the last quarter.
At 10:05 a.m. ET (1405 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 493.93 points, or 2.62%, at 19,375.12, its highest level since Sept. 21.
Global stocks and bond prices rallied on Tuesday on the back of a weaker read of U.S. manufacturing data for September and a retreat in eye-wateringly high European energy prices.
A smaller rate rise by the Aussie central bank helped push down borrowing costs around the world pumping investor's risk appetite.
"I think the markets are starting to look a little more dovish based on what Australia did overnight and what the UK Bank of England did last week. It remains to be seen how that's going to play out," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
"Canadian job growth has actually declined for the last three months, so if we do get another weak number that could add to the case of the Bank of Canada perhaps not raising as quickly going forward."
The Bank of Canada (BoC) has increased its benchmark rate by 300 basis points since March to a 14-year high of 3.25% and is expected to remain on a rate-hiking path, with traders now pricing in a 26.5% probability of another 50 bps hike later, down from over 50% chance last week.
Boosting the resources-heavy TSX, energy and the materials sector, which includes precious and base metals miners and fertilizer companies, jumped 2.6% and 2.1%, respectively, tracking a more than 2% jump in crude and gold prices.
Those two groups together account for nearly 30% of TSX's weightage.
Healthcare and the technology sector climbed 4.4% and 4.1%, respectively, with the latter getting a boost from an 8.4% jump in shares of Shopify Inc.
On the TSX, 230 issues were higher, while four issues declined for a 57.50-to-1 ratio favouring gainers, with 48.17 million shares traded.
The TSX posted one new 52-week high and one new low.
Across all Canadian issues, there were six new 52-week highs and seven new lows, with total volume of 72.53 million shares. (Reporting by Shashwat Chauhan in Bengaluru; editing by Uttaresh.V and Maju Samuel)
