Canada’s main stock index climbed on Tuesday as a rise in gold and crude prices lifted energy and material stocks, while focus turned to domestic bank earnings amid worries over faster monetary policy tightening and a potential recession.
At 10:42 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 60.43 points, or 0.3%, at 20,035.35.
The energy sector climbed 3.4% as oil prices rose more than $2 a barrel on tight supply concerns after Saudi Arabia floated the idea of OPEC+ output cuts to support prices and the prospect of a drop in U.S. crude inventories.
The materials sector, which includes precious and base metals miners and fertilizer companies, rose 2.6% as gold prices advanced.
The financials sector slipped 0.7%, the biggest decliner among all the TSX sectors.
Shares of Bank of Nova Scotia fell 3.6% after the lender reported third-quarter profit a touch below estimates, but earnings rose from a year earlier as strong loan growth in its international business.
Analysts are focused on earnings of domestic banks this week and have been expecting provision for credit losses to begin to tick higher, reversing the trend of the past several quarters, as banks brace for a rise in potential delinquencies driven by rising inflation and interest rates.
Meanwhile, markets also got a boost after a weaker U.S. economic data on Tuesday fueled hopes that the Federal Reserve might not be as aggressive in raising interest rates to tame price pressures.
All eyes are on now on comments from Fed Chair Jerome Powell, who is headlining a central banking conference in Jackson Hole, Wyoming on Friday.
Money markets are nearly split in their expectations for a 50 bps and 75 bps hike by the Bank of Canada at the September meeting even as data showed inflation eased slightly in July on lower gasoline prices.
Highlights
On the TSX, 150 issues were higher, while 86 issues declined for a 1.74-to-1 ratio favouring gainers, with 60.46 million shares traded.
The TSX posted two new 52-week highs and one new low.
Across all Canadian issues there were eight new 52-week highs and six new lows, with total volume of 93.64 million shares.