Canada’s main stock index rose on Wednesday led by precious metal miners and technology stocks, a day after the TSX posted its longest streak of daily declines since May on worries of a global recession.
At 10:04 a.m. ET (14:04 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 71.21 points, or 0.39%, at 18,379.12.
The energy sector added 0.5% as crude prices rose 1% a barrel. The materials sector , which includes precious and base metals miners and fertilizer companies, gained 2.5% with shares of Eldorado Gold jumping 8.9% to the top of TSX.
Those two groups together account for nearly 30% of TSX’s weightage.
Tech stocks rose 0.5% as Canadian government bond yields were lower, tracking a similar trend in U.S. Treasuries after the Bank of England said it would step into the bond market to stem a damaging rise in borrowing costs.
The TSX has lost 4.5% so far this month and is set for a second straight month of declines as investors worried that higher borrowing costs to tackle inflation could tip some major economies into recession.
Markets are pricing in a 56% chance of a 50-basis points hike in interest rates by the Bank of Canada next month. It has already lifted rates by 300 bps in just six months this year.
“The Bank of Canada will hike again in October and take the overnight rate up by half a percentage point to 3.75% and then the question is do they continue to tighten from there,” said Craig Alexander, chief economist at Deloitte Canada.
“Monetary policy in Canada is already restrictive and combined with the improvement that we’ve seen in global supply chains and the drop in commodity prices coming from the global slowdown, the pieces are in place for inflation to trend significantly lower in the coming months.”
Among individual stocks, Sandstorm Gold dipped 8.9% after the gold-focused streaming and royalty company announced $80 million bought financing deal.
Algoma Steel Group dropped 11.7% to the bottom of TSX as brokerages cut their price targets on the stock after the company provided second-quarter guidance.
BlackBerry slipped 3.3% after the software company reported a fall in cybersecurity revenue for the second quarter, as customers cut spending due to an uncertain macroeconomic environment. (Reporting by Shashwat Chauhan; Editing by Vinay Dwivedi and Arun Koyyur)