Canadian Markets Holds In Positive Territory Despite Paring Some Gains
(RTTNews) - After a rousing start and a subsequent move up north, Canadian stocks pared some gains Wednesday morning, but still remain firmly placed in positive territory around noon.
Encouraging news on the coronavirus vaccine front set up the stage for the market this morning and prompted investors to somewhat ignore a record single-day spike in new coronavirus cases in the U.S.
Close on the heels of recent positive developments on coronavirus treatment and vaccine fronts, U.S. biotech firm Moderna has announced that its experimental vaccine for Covid-19 was safe and produced strong immune responses in all 45 patients in an ongoing early-stage human trial. An interim analysis of the open-label Phase 1 study of the vaccine candidate was published in the New England Journal of Medicine.
The Bank of Canada today left its interest rate unchanged at 0.25% and said the rate will have to stay low to provide "extraordinary monetary policy support" to help recuperate from the economic impact of COVID-19.
In its policy statement, the bank said it expects the economy to contract by 7.8% this year, driven downward by a year-over-year contraction of 14.6% in the second quarter. Annual inflation rate is pegged at 0.6% this year, rising 1.2% in 2021 and 1.7% in 2022.
BoC said its inflation target is 2% and that it will maintain the current rate until that target is achieved. The bank said its outlook is based on the assumption that there won't be a broad-based second wave of the pandemic, that lockdowns will be gradually lifted, and the pandemic will have run its course by mid-2022 thanks to a vaccine effective treatment.
Except stocks from information technology and materials sections, stocks from all other sectors are attracting strong buying enquiries. Healthcare, real estate, energy, consumer discretionary and financial stocks are mostly up with impressive gains.
The benchmark S&P/TSX Composite Index, which rose to 16,130.58 at one stage, gaining more than 220 points, is up 90.69 points or 0.57% at 15,999.14 a few minutes past noon.
Among the most actively traded stocks, Air Canada (AC.TO) is soaring nearly 8%. Cenovus Energy (CVE.TO) is up 5.7%, Baytex Energy (BTE.TO), Vermilion Energy (VET.TO) and Aphria Inc. (APHA.TO) are up 4.2 to 4.5%, and Bombardier (BBD.B.TO) is rising 3.6%.
Husky Energy (HSE.TO) is moving up 2.8%, while Toronto-Dominion Bank (TD.TO), Crescent Point Energy (CPG.TO), Canadian Natural Resources (CNQ.TO), Suncor Energy (SU.TO) and Manulife Financial (MFC.TO) are up 1 to 2% on impressive volumes.
Among other major gainers, Dollarama (DOL.TO) is up 2.3%, TC Energy (TRP.TO), Bank of Montreal (BMO.TO), Bank of Nova Scotia (BNS.TO), Royal Bank of Canada (RY.TO), Canadian Imperial Bank of Commerce (CM.TO) and Canadian National Railway (CNR.TO) are gaining 1 to 2%.
Investors were also digesting data on vehicles sales for the month of May and a report on manufacturing sales.
Sales of new motor vehicles in Canada rose to about 109,000 in the month of May, from 47,168 units a month earlier, data showed.
Manufacturing sales in Canada jumped 10.7% over a month earlier to C$ 40.2 billion in May 2020, following a downwardly revised record 27.9% slump in the previous month.
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