Canada’s main stock index rose to a near four-week high on Wednesday, with metal mining stocks leading a broad-based rally as the U.S. dollar fell ahead of employment data that could support prospects of Federal Reserve interest rate cuts.
The S&P/TSX composite index ended up 269.87 points, or 1.2%, at 22,223.67, its highest closing level since June 6 as U.S. economic data pointed to easing labor market conditions.
“It’ll also be interesting to see what happens with non-farm payrolls on Friday, but today you’re kind of getting a mixed bag of economic numbers,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
Economists expect the U.S. non-farm payrolls report on Friday to show a slower pace of job growth. Markets hope that signs of weakness in the labor market will encourage the Fed to cut interest rates.
The U.S. 10-year Treasury yield, a benchmark for borrowing costs globally, eased about 8 basis points to 4.35% and the U.S. dollar touched a near three-week low against a basket of major currencies.
The materials group, which includes metal miners and fertilizer companies, rose 3.4%, as a weaker U.S. dollar boosted gold and copper prices.
The price of oil also rose, settling 1.3% higher at $83.88 a barrel. That helped the energy group, which was up 0.6%.
All ten major sectors on the Toronto market ended higher, with heavily weighted financials up 1% and industrials adding 1.4%.
The utilities group, which is dominated by high dividend-paying stocks that could particularly benefit from lower interest rates, climbed 1.5%.
Shares of Open Text Corp ended 1.5% higher after the company announced a business optimization plan expected to result in the reduction of nearly 1,200 positions.
(Reporting by Fergal Smith in Toronto and Nikhil Sharma in BengaluruEditing by Vijay Kishore, Shreya Biswas and Matthew Lewis)
