Canada’s primary stock index concluded another robust quarter on Thursday, surging to a fresh all-time high, buoyed by gains in resource shares amid speculation of potential interest rate cuts in the upcoming months to spur economic expansion.
The S&P/TSX Composite index of the Toronto Stock Exchange closed up by 59.95 points, or 0.3%, reaching 22,167.03, marking a record closing peak. Additionally, the index hit an intraday high at 22,220.91, surpassing its previous peak set in April 2022.
Investors anticipate a shift towards reflation in recent trading, noted Mike Archibald, a portfolio manager at AGF Investments. He highlighted the strong performance of commodities and a rally in banking shares both domestically and in the United States.
Despite this, investors continue to bet on the Bank of Canada initiating rate cuts starting in June.
March witnessed a 3.8% increase in the TSX, marking its fifth consecutive month of gains. It registered a 5.8% advance in the first quarter, following a 7.3% gain in the previous quarter.
Archibald expressed optimism about the potential continuation of the commodity rally, suggesting a positive outlook for Canada in the second quarter if this trend persists.
Resource shares, constituting 30% of the TSX’s weight, drove the index’s gains. The materials sector, encompassing metal miners and fertilizer firms, surged by 2.1% on Thursday, fueled by a rise in gold prices.
Nutrien Ltd., the world’s leading potash fertilizer producer, is reportedly considering divestments in South America, according to sources with direct knowledge of the matter. The company’s shares climbed by 1.1%.
Energy stocks also ended higher, posting a 0.8% gain, as oil prices settled up by 2.2% at $83.17 a barrel.
