© Stocksak. FILE PHOTO – The sign for the Toronto Stock Exchange is seen in Toronto (Ontario, Canada) July 6, 2017. REUTERS/Chris Helgren
TORONTO (Stocksak) – Canada’s main stock index rallied on Wednesday to its highest closing level in more than three weeks, as a smaller-than-expected interest rate hike by the Bank of Canada fueled hopes the central bank is nearing the end of its tightening cycle.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 182.75 points, or nearly 1%, at 19,279.76, its highest closing level since Oct. 4.
“This bearish market rally was about over, but the Bank of Canada still had other plans,” Edward Moya in New York, senior market analyst at OANDA, stated in a note.
The BoC raised its benchmark rates by half a point, but failed to make the additional 75 basis points moves. It also said that it was closer to the end its historic tightening campaign.
Tiffany Wilding (North American economist at PIMCO) stated that “We think they’ll likely hike another 25 basis points in December to end this hiking cycle.”
The Toronto market’s energy sector rose 1.8% while oil futures settled 3% higher, at $87.91/barrel.
Materials, which include precious and base metals miners, and fertilizer companies, saw an increase of 1.8%. Industrials, however, ended 1.3% higher.
Shares in Rogers Communications Inc rose 5.8%, while Shaw Communications Inc shares rose 7.2%. Investors placed a bet that Canada would approve Rogers Communications bid for Shaw.