Canada’s main stock index rose on Wednesday, with technology stocks leading gains, after data showed a slower-than-expected rise in U.S. inflation last month.
At 10:06 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 194.76 points, or 0.99%, at 19,773.06.
Technology stocks jumped 2.7% as Converge Technology Solutions surged over 12% to lead gains. Canadian tech firms were also tracking a 2.2% move higher on the Nasdaq Composite index.
Data showed U.S. prices were unchanged in July due to a sharp drop in the cost of gasoline, delivering the first notable sign of relief for weary Americans who have watched inflation climb over the past two years.
It came as a relief to investors worried that aggressive tightening cycles by central banks across the world to tame inflation could push the global economy into a recession.
“Markets have good reason to cheer the CPI number finally. It’s taking a lot of heavy lifting by the central banks to raise interest rates and talk down the economy and that seems to be working,” said Barry Schwartz, portfolio manager at Baskin Financial Services.
Canada is expected to report its inflation figures next week, and investors are expecting a 50-basis-point interest rate hike by the Bank of Canada in September.
“I would look for more muted hikes going forward in the 50-basis-point range as commodity prices have fallen a little bit,” Schwartz added.
The energy sector dropped 0.7%, the sole sectoral decliner, as U.S. crude prices were down 1.5% a barrel, while Brent crude lost 1.4%.
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