Despite the news of rise in inflation, Canada’s benchmark index defied an early morning drop to pursue another day of gains.
The Toronto Stock Exchange’s S&P/TSX Composite Index started the day’s trading on a negative note, weighed down by the news of the inflation figure for June, which rose to 8.1 per cent. The drop in crude oil and gold prices also added to the Canadian benchmark index’s burden in early morning trading.
At 9:30 a.m. ET, when the Toronto Stock Exchange opened for the day’s trading, the Canadian benchmark index was facing south by 25.27 points, or 0.13 per cent, at 18,912.44. The market had closed on Tuesday at 18,937.71.
The consumer price index figures released by Statistics Canada Wednesday morning showed that June’s inflation figure of 8.1 per cent was the highest level Canada has witnessed since January 1983. However, the inflation height of June fell short of the 8.4 per cent projection for the month. In May, Canada’s inflation figure was 7.7 per cent.
At 10:10 a.m. ET, the TSX index was still down 54.24 points, or 0.29 per cent, at 18,883.47. Material stocks fell 0.9 per cent in response to the fall in gold prices as the US dollar gained strength. Energy stocks dropped 0.7 per cent as oil prices fell. The financials sector slipped 0.3 per cent.
However, soon after that, the TSX shook off the news of the rise in inflation and began a gradual ascent. By 11.14 a.m. ET, the index had gone over the 19,000 mark, standing at 19,000.94. Even though it dropped below 19,000, the index was still doing well into the afternoon, not dropping below 18,900.
By 11.33 a.m. ET, the top three performing stocks were Canopy Growth Corp., which rose 19.70 per cent; Tilray Inc., which gained 13.38 per cent; and Aurora Cannabis Inc., which went up 11.99 per cent.
On the flip side, the three stocks that were lagging were Wesdome Gold Mines Ltd., down 4.76 per cent; First Quantum Minerals Ltd., which shed 3.98 per cent; and Precision Drilling Corp., which lost 3.45 per cent.
Unlike when the index showed red in all periods of comparison, the TSX showed green in the past five days with a rise of 1.91 per cent. In the past month, the index lost marginally by 0.17 per cent.
However, in the past three months, the index lost 13.76 per cent, while in the past one year, it lost 5.66 per cent.
The Canadian dollar was exchanging for US$0.7761, with a loss of C$0.0003 or 0.0386 per cent.
Meanwhile, oil prices fell on Wednesday in reaction to the twin issues of U.S. government data showing lower gasoline usage demand during the peak summer driving season and an aggressive hike in interest rates by central banks of various countries to tame inflation and ward off recession.
Brent crude prices for September fell 37 cents to US$106.98 a barrel by 11:02 a.m. ET. U.S. West Texas Intermediate (WTI) crude for August dropped US$1.87, or 1.8 per cent, to $102.35 a barrel.
By Tuesday’s close of the market, the S&P/TSX Composite Index had achieved three unbroken days straight. Therefore, it entered today’s trading with its longest winning streak since late May. Except for utilities, all the significant subgroups closed in positive territories yesterday, with only 30 members of the index closing lower.
Therefore, the TSX seemed not to want the news of inflation to dampen its spirit as it trudged on, climbing over the 19,000 mark again and standing at 19,001.02, or 0.33 per cent, at 12.26 p.m. ET.
While the market trudges on at an uncertain time like this, in the early days of this week, the investment-driven readers of The Market Herald Canada have taken a particular interest in commodities, especially gold and oil and gas. Here are the three most-viewed stories so far this week:
Cerrado Gold (CERT) released further assay results from its ongoing infill drill program at the Serra Alta deposit at its Monte do Carmo Project.
CGX Energy’s (OYL) CFO George Davis stepped down for personal reasons effective immediately and Daniel Sanchez, Head of Corporate Consolidation and Reporting at Frontera Energy (FEC), stepped in to fill the role.
Finally, Marathon Gold (MOZ) achieved several important stakeholder agreements and permitting milestones for the Valentine Gold Project in Newfoundland.