The Canadian market saw a slight rise on Wednesday, primarily driven by the materials and consumer discretionary sectors. Other sectors, such as communications, consumer staples, and utilities also saw an uptick, while healthcare stocks underperformed.
Positive market responses followed the Bank of Canada's announcement on monetary policy and Federal Reserve Chair, Jerome Powell's address to the House Financial Services Committee. The benchmark S&P/TSX Composite Index early hike of nearly 200 points was reduced, ending the trading day at 21,593.96. This reflected a modest overall gain of 68.03 points or 0.32%.
As expected, the Canadian central bank has retained the overnight rate at 5%, with the bank rate and deposit rate at 5.25% and 5% respectively. Risks concerning the inflation outlook, particularly with persistent underlying inflation, continue to concern the bank’s Governing Council.
Jerome Powell suggested a likely lowering of interest rates at some stage this year. However, he stressed the need for increased confidence that inflation is moving sustainably towards 2%.
Shares in several companies, including AltaGas (ALA.TO), ARC Resources (ARX.TO), Canadian Imperial Bank of Commerce (CM.TO), Brookfield Asset Management (BAM.TO), Celestica Inc (CLS.TO), Aecon Group (ARE.TO) and Snc-Lavalin Group Inc (ATRL.TO), hit new 52-week highs. Others, like Bombardier Inc (BBD.B.TO), Ag Growth International (AFN.TO), Stella-Jones (SJ.TO), CCL Industries (CCL.A.TO) and Descartes Systems Group (DSG.TO), gained between 2-5%.
However, Paramount Resources (POU.TO) saw a significant drop of over 12%, while Nuvei Corporation (NVEI.TO) fell by 10.4%. Various other companies such as Franco-Nevada Corporation (FNV.TO), Canadian National Railway (CNR.TO), Aritzia Inc (ATZ.TO), RB Global (RBA.TO) and BRP Inc (DOO.TO) also closed notably lower.
A report from Ivey Business School noted a decline in the Ivey Purchasing Managers Index in Canada for February 2024, standing at 53.9 as compared to 56.5 in January. Furthermore, Statistics Canada data showed a 0.4% increase in labor productivity for the fourth quarter of 2023, an improvement from the revised 0.5% fall in the previous period.
