Shortly after noon on Wednesday, the Canadian market was performing strongly, thanks to investors analyzing the latest policy announcement from the Canadian central bank, along with continued reaction to recent quarterly earnings updates and economic data.
Materials and consumer discretionary stocks were among the most significant winners. There were also noticeable gains in the technology, utilities, energy, consumer staples, and financial sectors.
The primary yardstick for measuring Canadian stocks, the S&P/TSX Composite Index, was up 104.44 points or 0.5%, standing at 21,630.37 just after midday.
As anticipated, the Bank of Canada decided to maintain its overnight rate at 5%, with the bank rate and deposit rate also steady at 5.25% and 5% respectively.
The bank's Governing Council expressed continued concern about inflation risks, particularly the resilience of underlying inflation. The Council emphasized its desire to achieve substantial and sustained reduction in core inflation, focusing on balancing demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behavior.
According to the central bank, inflation is predicted to continue hovering close to 3% in the first half of this year before gradually decreasing. Despite this, the bank affirmed its commitment to restoring price stability for Canadians.
Companies such as Ag Growth International and Celestica Inc saw increases in their stock prices of 5% and 4.2% respectively. Other companies such as Boyd Group, Canadian Pacific Kansas City, Restaurant Brands International, Kinaxis Inc, TFI International and Fairfax Financial Holdings also saw their stocks rise between 1 and 2%.
However, it wasn't all rosy, as companies like Paramount Resources saw a sharp drop in their stocks by 11%, Nuvei Corporation by 4.6%, and BRP Inc, Canadian National Railway and RB Global Inc witnessed their stocks decline by 1 to 1.2%.
On the economic data front, the Ivey Purchasing Managers Index in Canada - a report produced by the Ivey Business School - dropped to 53.9 in February 2024, a decrease from 56.5 in January. Meanwhile, data from Statistics Canada revealed that labor productivity in Canada had a 0.4% increase in the fourth quarter of 2023, rebounding from a revised 0.5% decline in the previous quarter.
