TSX closes above 20,000 for first time in two months
4:40 pm Friday, August 12th, 2022
By Fergal Smith
(Reuters) – Canada’s main stock index rose on Friday, extending the week’s gains, as investors cheered signs of easing inflation pressures and two major telecom companies made headway with their merger deal.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 187.93 points, or 0.9%, at 20,179.81, closing above the 20,000 threshold for the first time since June 10.
For the week, the index was up 2.9%, getting a bump from softer-than-expected inflation data in the United States.
“It looks like inflation pressures are ebbing a little bit,” said Elvis Picardo, portfolio manager at Luft Financial, iA Private Wealth.
“They were so elevated to begin with that any hint of a reversal or a slight softening in inflation pressures is being taken as a positive.”
Investors have worried that central banks around the world will be unable to cool price pressures without triggering downturns.
Canada’s inflation report for July is due on Tuesday, which could offer clues on the Bank of Canada policy outlook.
“The market is worried that the Bank of Canada will over-tighten interest rates and push the economy into a recession,” said Angelo Kourkafas, investment strategist at Edward Jones Investments.
The materials group, which includes precious and base metals miners and fertilizer companies, led broadbased gains. It added 2.1% as a drop in U.S. Treasury yields helped push the price of gold up to $1,800 per ounce.
Rogers Communications Inc and Shaw Communications Inc finalised an agreement to sell Freedom Mobile to Videotron, a unit of Quebecor Inc, in a C$2.85 billion ($2.23 billion) deal.
The spinoff comes at a time when Canada’s antitrust agency has kept the Rogers’ C$20 billion acquisition of Shaw on hold since May, citing competition concerns.
Rogers rose 0.5%, Shaw gained 1.6% and Quebecor ended 3.2% higher.
(Reporting by Fergal Smith; Additional reporting by Johann M Cherian in Bengaluru; Editing by Anil D’Silva and Grant McCool)