TSX Ends Modestly Higher After BoC's Policy Announcement

(RTTNews) - Despite paring some early gains, the Canadian market ended modestly higher on Wednesday with materials and consumer discretionary stocks posting notable gains.

Several stocks from communications, consumer staples and utilities sectors also moved higher. Healthcare stocks were weak.

The market reacted positively to the Bank of Canada's monetary policy announcement, and the Federal Reserve Chair Jerome Powell's testimony before the House Financial Services Committee.

The benchmark S&P/TSX Composite Index, which climbed to 21,712.73 in early trades, gaining nearly 200 points in the process, kept paring gains and eventually ended the day's session at 21,593.96 with a modest gain of 68.03 points or 0.32%.

As widely expected, the Canadian central bank decided to leave its target for the overnight rate at 5%, with the bank rate at 5.25% and the deposit rate at 5%.

The central bank said its Governing Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation.

Powell told the committee that it will likely be appropriate for the Fed to begin lowering interest rates at "some point this year." However, he reiterated officials need "greater confidene" inflation is moving sustainably toward 2%.

Several stocks, 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) recorded new 52-week highs in the session.

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 2 to 5%. Loblaw Companies (L.TO), Boyd Group Services (BYD.TO), TFI International (TFII.TO) and Fairfax Financial Holdings (FFH.TO) also posted strong gains.

Paramount Resources (POU.TO) tanked more than 12%. The company reported a net income of $111.9 million for the quarter ended December 2023, compared to net income of $259.9 million a year ago.

Nuvei Corporation (NVEI.TO) plunged 10.4%. The company reported adjusted net income of $68.6 million for the quarter ended December 31, 2023, up 1% from a year ago.

Franco-Nevada Corporation (FNV.TO), Canadian National Railway (CNR.TO), Aritzia Inc (ATZ.TO), RB Global (RBA.TO) and BRP Inc (DOO.TO) also ended notably lower.

A report from Ivey Business School said the Ivey Purchasing Managers Index in Canada declined to 53.9 in February 2024, down from 56.5 in January.

Data from Statistics Canada showed labor productivity in Canada increased by 0.4% in the fourth quarter of 2023, following a downwardly revised 0.5% fall in the prior period.