The Canadian stock market closed on a firm note on Wednesday, gaining in strength gradually after some early weakness.
Investors reacted positively to the Bank of Canada’s monetary statement, and the data on consumer price inflation. The market also benefited from some bargain hunting after two successive days of losses.
A massive surge in coronavirus cases in several countries, including India, dented optimism about a quick global economic rebound and limited market’s gains.
Healthcare, information technology and materials shares were the prominent gainers. A few stocks from consumer discretionary, energy and financial sectors too posted strong gains, while stocks from the rest of the sectors ended on a mixed note after a somewhat lackluster performance.
The benchmark S&P/TSX Composite Index ended with a gain of 102.47 points or 0.54% at 19,143.25, slightly off the day’s high of 19,152.82.
The Capped Healthcare Index climbed 4.03%. Organigram Holdings (OGI.TO) soared 8.2%, Aurora Cannabis (ACB.TO) gained 6.15%, Canopy Growth Corp (WEED.TO) climbed 5.4% and Aphria Inc (APHA.TO) rallied 5%.
Information technology stocks Lightspeed Pos (LSPD.TO) and BlackBerry (BB.TO) gained 5.4% and 4.8%, respectively. Constellation Software (CSU.TO) moved up 3.1% and Photon Control (PHO.TO) advanced 2.7%, while Sierra Wireless (SW.TO) and Absolute Software (ABST.TO) both ended higher by about 2%.
In the materials section, Endeavour Silver Corp (EDR.TO), Fortuna Silver Mines (FVI.TO), Intertape Polymer (ITP.TO), MAG Silver Corp (MAG.TO), Silvercrest Metals (SIL.TO), CCl Industries (CCL.B.TO) and First Majestic Silver Corp (FR.TO) gained 3.5 to 5.5%.
Canadian Pacific Railway Ltd. (CP.TO) announced that it is appealing to the U.S. regulator that governs railway mergers to dispute a claim by Canadian National Railway Co. (CNR.TO) that its rival bid for Kansas City Southern will be assessed in the same way as CP’s bid. Shares of Canadian Pacific Railway and Canadian National Railway ended lower by 0.8% and 0.2%, respectively.
The Bank of Canada, which left its rates unchanged, said in the accompanying statement that economic growth in the first quarter appeared considerably stronger than the Bank’s January forecast, as households and companies adapted to the second wave and associated restrictions.
Inflation is expected to rise temporarily to around the top of the 1-3% inflation-control range in the coming months.
The central bank said that it remains committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2% inflation target is sustainably achieved.
Data from Statistics Canada showed the annual inflation rate in Canada rose to 2.2% in March from 1.1% in February and slightly below market expectations of 2.3%, The Consumer Price Index increased 0.5% in March over the previous month.
The data also showed that core consumer prices in Canada increased 1.4% in March over the same month in the previous year.
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