(RTTNews) – Canadian stocks moved higher on Thursday as markets assessed the implications of interest rate cuts instituted by the central banks – both in Canada and the US – against the backdrop of a slowdown in the jobs markets in both nations.
After opening just above yesterday’s close, the benchmark S&P/TSX Composite Index traded positive, notching a record intraday high of 29,504.21 an hour past noon before finally settling at 29,453.53, up by 131.87 points (or 0.45%).
Six of the 11 sectors posted gains today with IT sector leading the pack.
In a significant move yesterday, the Bank of Canada cut its benchmark interest rate by 25 basis points to 2.50%, with the bank rate at 2.75% and the deposit rate at 2.45%. The next scheduled date for announcing the overnight rate target is October 29.
While making the announcement, Bank of Canada Governor Tiff Macklem stated that the “risks have shifted” since the central bank’s last interest rate decision in July.
Macklem added that cracks in the labour market and a sharp drop in exports are threatening growth while earlier signs of underlying inflation pressures are fading. Macklem also stressed that a lot of “unknowns are tied to US tariffs” and the global trade disruption.
Mirroring Canada, the US Federal Reserve also lowered the target range for the federal funds rate by 25 basis points to 4.0% to 4.25%, citing a “shift in the balance of risks.” Projections from Fed officials also suggest they expect the central bank to lower rates two more times this year.
Canadian PM Mark Carney is fighting hard to revive the economy, with GDP contracting after US President Donald Trump’s imposition of 35% tariffs on Canadian exports.
Carney is also facing a tough challenge to handle homeless encampments across the nation, with Barrie Mayor Alex Nutall writing to him requesting federal help, citing rampant drug abuse and lawlessness.
Canada’s high-level talks with US counterparts to arrive at a tariff framework has “paused” due to a lower US court ruling that adjudged the “tariff imposition” as illegal, a judgment which the Trump administration has appealed to the US Supreme Court.
With the unpredictability on US tariffs looming large, Carney arrived today on a two-day mission to meet Mexican President Claudia Sheinbaum to possibly forge a trade alliance, keeping the US out.
Canadian companies have invested around C$50 billion in Mexico, largely in energy and mining.
As both Canada and Mexico rely heavily on the US for trade and investment, the talks are another challenging task for Carney, as any perception of forming a counter-US bloc could anger the US.
The business barometer long-term index released today by Canadian Federation of Independent Business revealed that the index rose to 50.2 in September, two points up from the previous month.
Major sectors that gained in today’s trading were IT (1.67%), Financials (0.53%), Healthcare (0.47%), and Utilities (0.47%).
Among the individual stocks, Bitfarms Ltd (5.00%), Blackberry Ltd (4.70%), Shopify Inc (3.03%), Brookfield Corporation (2.18%), and Bausch Health Companies Inc (1.17%) were the prominent gainers.
Major sectors that lost in today’s trading were Consumer Discretionary (0.05%), Industrials (0.05%), Energy (0.15%), Real Estate (0.34%), and Communication Services (1.39%).
Among the individual stocks, Cogeco Communications Inc (1.79%), Rogers Communications Inc (1.42%), CDN Apartment Un (1.39%), and Baytex Energy Corp (1.71%) were the notable losers.
Capital Power Corp (6.15%) and Novagold Res Inc (3.19%) were among the prime market-moving stocks today.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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