Toronto Shares Rise On Higher Oil Prices, Rate Cut Hopes

 

• Canada's main stock index rose on Monday, led by gains for the energy sector, as optimism that central banks could soon begin cutting interest rates boosted the market.
• Falling bond yields, tighter credit spreads, and rising expectations that the Federal Reserve and the Bank of Canada will cut interest rates in 2024 are tailwinds for the stock market, said Stan Wong, a portfolio manager at Scotia Wealth Management.
• Canada's consumer price index report, due on Tuesday, could offer clues on the Bank of Canada policy outlook. Economists expect inflation to slow to an annual rate of 2.9% in November from 3.1% in October.
• Still, the stock market rally "may have run a bit too far too fast," said Wong, adding, "We've become a little bit more cautious over the very near-term, not committing a lot of cash into stock markets now, just given the fact that we're overbought."
• The energy sector rallied 1.5% as the price of oil settled 1.5% higher at $72.47 a barrel, with attacks by the Iran-aligned Yemeni Houthi militant group on ships in the Red Sea disrupting maritime trade and pushing up costs of supply. Consumer discretionary also added 1.5%, and heavily weighted financials were up 0.4%.

(Source: Reuters)