TORONTO — A broad-based rally allowed Canada’s main stock index to partially recover from last week’s big fall, the worst in more than two years, in light trading as U.S. markets were closed.
Colin Cieszynski, chief market strategist at SIA Wealth Management, said many sectors were up nicely to start the trading week, which is not unusual when the Toronto market is open and U.S. stock markets are closed.
“So it’s a decent day for Canada, all in considering that the U.S. was closed and overseas markets didn’t do a heck of a lot,” he said in an interview.
The S&P/TSX composite index gained 253.15 points or 1.3 per cent to 19,183.63, after ending a brutal week that saw it plunge 6.6 per cent in its worst performance in more than two years.
U.S. stock markets were closed for the Juneteenth holiday.
After being hit hard last week, the closure of U.S. markets probably helped to relieve some selling pressure, Cieszynski said.
“It’s just kind of this relentless selling pressure that we’ve seen for most of this month taking a day off.”
Utilities was the lone sector in the red. Ten sectors moved higher, led by telecommunications and energy.
Telecom increased 3.6 per cent as investors applauded the announced $2.85 billion sale of Shaw Communications Inc.’s wireless carrier Freedom Mobile to Quebecor Inc.-owned Videotron Ltd. The transaction could pave the way for final approvals of Rogers Communications Inc.’s $26-billion takeover of Shaw.
Rogers shares increased 5.9 per cent, Shaw’s climbed 7.8 per cent and Quebecor’s were 5.8 per cent higher.
Energy was another strong performer, increasing 2.5 per cent as crude oil prices increased, with Suncor Energy Inc. gaining 4.6 per cent.
Cieszynski said he hopes the sector’s positive move will continue when U.S. markets reopen on Tuesday.
“Are the Americans going to come back and keep selling down the energy sector or are they going to let the sector come back as well because that was quite a hit it took last week.”
The August crude contract was up 78 cents at US$108.77 per barrel and the July natural gas contract was down 25 cents at US$6.69 per mmBTU.
Cieszynski said energy’s increase was “relatively moderate” compared to last week’s losses.
“It’s nice and if we were in an upward trend, we’d go great. But in a downtrend this is more of like a bit of a bounce than a big turn around at this point.”
The heavyweight financials sector increased 1.4 per cent as 10-year Canada government bond yields rose. All Canadian banks were stronger on the day, led by National Bank which gained 3.2 per cent.
The Canadian dollar traded for 76.96 cents US compared with 76.72 cents US on Friday.
The materials sector, which includes miners, forestry producers and fertilizer firms, was up as Nutrien Ltd. shares climbed 3.6 per cent and Teck Resources Ltd. shares rose 3.4 per cent.
The August gold contract was up 10 cents at US$1,840.60 an ounce and the July copper contract was down less than a penny at US$4.01 a pound.
Cargojet Inc. surged 11.1 per cent while Air Canada was up 3.2 per cent to help lift industrials.
The coming week will be partially guided by economic news with housing data in the U.S., Canadian retail sales and consumer prices, and PMI reports from around the world.
Cieszynski said the Canadian numbers will be important because of the speculation that the Bank of Canada will follow the U.S. Federal Reserve’s decision last week by raising its trendsetting interest rate by three-quarters of a per cent to help tackle soaring inflation.
“So the only way that you might get a surprise is if something happened to change that assumption.”
This report by The Canadian Press was first published June 20, 2022.
Companies in this story: (TSX:NA, TSX:SU, TSX:NTR, TSX:SJR.B, TSX:RCI.B, TSX:QBR.B, TSX:GSPTSE, TSX_CADUSD=X)
