TSX set to recover losses of past three weeks

Despite last week’s positive news of a drop in Canada’s inflation rate to 5.9 per cent, the stock market performed poorly.

The January inflation rate of 5.9 per cent was lower than the 6.1 per cent projected by financial analysts after the 6.3 per cent recorded in December. An impressive job gain of 153,000 was also recorded in January.

However, all that did not stop the Toronto Stock Exchange’s S&P/TSX composite index from having its worst week of 2023 on Friday, losing 1.4 per cent. It was also its third straight week of losses after recording its lowest closing day in six weeks on Thursday.

However, when the market opened this week, the index shot up, seemingly on a mission to recover the losses of the past three weeks. The index was lifted by gains made in industrial and materials stocks.

Also, the news that the United States firm LKQ Corporation would buy Uni-Select Inc. for C$2.8 billion ($2.06 billion) saw the stock of Uni-Select rising by 16.1 per cent. The gain was an all-time intraday high for the auto parts distributor. The performance of the Uni-Select stock made its sector, the consumer discretionary sector, among the top three gainers.

At 10:14 a.m. ET, the TSX index was up 147.63 points, or 0.73 per cent, at 20,366.82. At 1:00 p.m., even though it had dropped to 20,299.32, it was still on positive grounds.

The three sectors with the highest gains at that time were materials, energy and consumer discretionary, with 1.02 per cent, 0.92 per cent, and 0.89 per cent respectively.  

Among the individual stocks, Uni-Select Inc. was leading, as has been said earlier, with 16.41 per cent. It was followed by Hudbay Minerals Inc., with 7.13 per cent, and Ero Copper Corp., with 5.26 per cent. The bottom performers were Advantage Energy Ltd., with a loss of 4.23 per cent; Sprott Inc., with a loss of 2.51 per cent; and Jamieson Wellness Inc., with a drop of 0.83 per cent.

Across the border in the United States, it was also good news as the S&P 500 was up 26.72 points, or 0.67 per cent, at 3,996.76. The DOW was also up 165.31 points, or 0.50, at 32,982.23.

Gold futures rose to US$1,826.60, gaining $9.50, or 0.52, while crude oil fell to US$75.80, shedding $0.52, or 0.68 per cent.

Finally, the loonie also rose against the American dollar. One Canadian dollar traded for US$0.7365, gaining $0.0023, or 0.3133 per cent.

Market movers

Huge transactions attract the attention of investors any day. It is, therefore, not surprising that our readers have been attracted by stories about companies from different sectors making huge acquisitions.

LKQ Corporation agreed to acquire all issued and outstanding shares of Uni-Select (UNS) for approximately C$2.8 billion (US$2.1 billion).

i-80 Gold Corp. (IAU) signed an agreement to acquire all outstanding common shares of Paycore.

McEwen (MUX) signed a binding agreement for an additional US$30 million investment by Nuton, a Rio Tinto Venture.

Capital raises so far include Orezone Gold, FireFox Gold, Gladiator Metals, and SuperBuzz.

Keep a date with us for the next time we will bring you the market summary.