The S&P/TSX Composite Index climbed about 0.4% on Monday to trade above the 35,000 mark, supported by strength in financials. Canada’s banking regulator cut capital requirements for major lenders for the first time in three years, freeing up funds that could be used to expand lending. Shares of RBC and BMO each advanced more than 1% on the news.
In contrast, oil prices weakened after US and Iranian officials wrapped up a first round of talks in Switzerland, easing worries about energy-driven inflation. Canada’s annual inflation rate accelerated to 3.2%, slightly above the 3% consensus, as higher gasoline costs continued to push up headline inflation amid supply concerns tied to the closure of the Strait of Hormuz. Still, softer core inflation readings helped moderate fears of more persistent price pressures.
Gold prices moved higher, boosting precious metals miners. Wheaton Precious Metals (WPM) gained 3.6%, while Agnico Eagle rose 1.3%.
