Canada’s main stock index rose on Monday as financial shares gained on expectations of an interest rate hike later this week.
At 11:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 48.54 points, or 0.3 per cent, at 16,420.45.
The Bank of Canada will hike interest rates on July 11 as strong job growth and rising inflation pressures override concerns about a deepening trade rift with the United States, a Reuters poll showed on Friday.
The Canadian dollar was at a near four-week high against its U.S. counterpart also helped by higher oil prices.
Nine of the index’s 11 major sectors were higher, led by a 0.2-per-cent gain in the financial sector
The materials sector added 0.3 per cent as gold extended its recovery and copper prices rallied.
Pretium Resources Inc. jumped 13.1 per cent, and Torex Gold Resources Inc. rose 5 per cent.
The energy sector climbed 0.5 per cent after oil prices rose as increased global demand and U.S. efforts to shut out Iranian output using sanctions outweighed drilling data suggesting U.S. shale production would climb.
The industrials sector was up 1.3 per cent, helped by a 2.3-per-cent rise each in shares of Canadian National Railway Co. and Canadian Pacific Railway.
U.S. stocks rose on Monday, with banking and industrial shares driving a third day of gains on Wall Street as investors looked ahead to a strong quarterly earnings season, setting aside trade concerns.
Bank stocks were the biggest gainers, with the S&P banks index rising 2.2 per cent, on track for its biggest percentage gain in over a month, helped by a rise in U.S. yields.
JPMorgan, Wells Fargo and Citigroup are scheduled to report on Friday, kicking off the second quarter earnings season in earnest.
“The market is anticipating a very good earnings season and ignoring any trade issues,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
“We’re not likely to get much color on trade from this earnings, so the expectation is still for a very good season.”
The United States and China slapped tit-for-tat tariffs on each other’s goods worth $34-billion on Friday, escalating a months-long trade dispute between the two countries.
But a strong U.S. jobs data and hope that the tariff enactment would not intensify to an all-out trade war helped the U.S. stocks close higher on Friday.
Estimates for S&P 500 second-quarter profit growth have risen slightly since April, putting the latest forecast at around 20.7 per cent, based on Thomson Reuters data. Given that the majority of companies typically beat analysts’ earnings expectations, that number is likely to rise.
The Dow Jones Industrial Average was up 267.57 points, or 1.09 per cent, at 24,724.05, the S&P 500 was up 19.36 points, or 0.70 percent, at 2,779.18 and the Nasdaq Composite was up 38.48 points, or 0.50 per cent, at 7,726.87.
Caterpillar rose 3.5 per cent, providing the biggest boost to the Dow. The S&P industrial sector jumped 1.7 per cent, with defense stocks Boeing, Lockheed Martin and Northrop Grumman all gaining.
Tesla was up 1.1 per cent after automotive news website Electrek reported the company hiked prices of its Model X and S cars by over $20,000 in China due to tariffs.
Twitter sank 8.3 per cent after a Washington Post report on social media company’s suspension of accounts, which analysts said would be negative for user growth.
Reuters