Canada’s main stock index rose on Wednesday, helped by mining shares, as investors cheered the Bank of Canada’s hefty interest rate cut and the possibility of a U.S. rate cut next week.
The TSX jumped 109.54 points to move into Wednesday afternoon to 25,613.87.
The Canadian dollar hiked 0.22 cents to 70.77 cents U.S.
The Bank of Canada cut its key interest rate by 50 basis points to 3.25%. The Bank Rate is now 3.75% and the deposit rate is 3.25%.
The top bank has reduced its key policy rate by 125 basis points since June amid worries about the country’s lukewarm economic growth, even as annual inflation came within its target range of 2%.
In corporate news, forest and wood products firm Canfor Corporation announced it has acquired 7% of outstanding shares of its Swedish peer VIDA AB effective today. Canfor shares edged down four cents to $16.45.
Bausch Health Companies dropped $1.12, or 9.5%, to $10.68 after a report said Blackstone may exit a group bidding for the eye care firm Bausch & Lomb, contributing to a more than 3% fall in the healthcare sector.
ON BAYSTREET
The TSX Venture Exchange eked up 1.14 points to 614.08.
Seven of the 12 TSX subgroups were up midday, with gold shining 2% brighter, materials 1.3% stronger, and information technology better 1.1%.
The five laggards were weighed most by health-care, sinking 3.4%, while communications ditched 1.8%, and utilities lost 0.9%.
ON WALLSTREET
The NASDAQ Composite rose Wednesday after November’s inflation report met economists’ projections, clearing the way for the Federal Reserve to cut interest rates again at its December meeting next week.
The Dow Jones Industrial index restrengthened 38.16 points to pause for lunch Wednesday at 44,285.99.
The S&P 500 index regrouped 50.91 points to 6,085.82
The tech-heavy ballooned 312.79 points, or 1.6%, to 20,000.04, smashing the 20K barrier.
Notably, Alphabet gained for a second day on the heels of Google making a breakthrough in quantum computing with its new chip. Other tech giants like Meta and Amazon were also higher.
Nvidia, Tesla and other bull market leaders climbed following the relatively tame inflation data as well. The chipmaker and Tesla ticked up more than 2%.
November’s consumer price index, which tracks a basket of goods and services, was in line with expectations. The reading showed a 0.3% rise from October and 2.7% increase from a year ago. Excluding volatile food and energy prices, core CPI increased 0.3% on the month and 3.3% on an annual basis.
While this inflation data represented a quicker pace from the prior month, traders speculated it was still not high enough to keep the Fed from cutting rates at its next gathering. Fed funds futures are pricing in a 99.9% likelihood that the central bank lowers rates at that gathering
Prices for the 10-year Treasury recovered, lowering yields to Tuesday’s 4.23%. Treasury prices and yields move in opposite directions.
Oil prices progressed $1.42 to $70.01 U.S. a barrel.
Prices for gold jumped $32.80 an ounce to $2,751.20 U.S.
