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Update: TSX Posts 42-Point Gain Wednesday Boosted by Energy Stocks, Index Falls Short of Record Highs

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Canada's main stock market made some headway Wednesday as the index neared the all time record high close seen last July. The S&P/TSX Composite Index was up 42 points or 0.25% to close at 16,544. The record high is 16,567. U.S. markets were little changed today, but all three indices finished in negative territory.

On the TSX, energy led advancers with a 1.4% increase as U.S. government data showed a decline in crude stocks. Consumer discretionary stocks rose 0.6%, followed by industrials, also at +0.6% and financials, up 0.4%. Consumer staples was the main decliner, off 1.4%, while materials and telecoms were also in negative territory.

In stock news , heavily traded Crescent Point Energy (CPG.TO) was up 3% while Aurora Cannabis (ACB.TO) was up 1%. Aphria (APHA.TO) lost 10% after announcing plans to issue up to $300 million of convertible debt. The company said it would sell the debt in a private placement to fund international expansion and acquisitions.

In economic news, Canada's CPI and trade reports support steady BoC policy next week, with no shift anticipated in the cautiously optimistic outlook for growth. CPI jumped to a 1.9% y/y pace in March from 1.5% in February, as expected amid a run-up in gasoline prices. The surprise of the report was that core CPI measures mostly accelerated, with CPI-trim at 2.1% y/y versus 2.0%, CPI-median at 2.0% versus 1.9% while CPI common was at 1.8% y/y from 1.8%.

Meanwhile, the trade deficit narrowed by a bit more than expected to -$2.9 billion in February from -$3.1 billion in January, but exports fell 1.3% m/m while imports contracted 1.6% to leave a mixed takeaway on trade. The pick-up in the annual growth rates of two of three core CPI measures to back or above 2.0% is the most significant development in terms of the BoC policy outlook, as it supports the BoC's view that the slowing in the economy over Q4/Q1 is temporary, with underlying inflation seen returning to the 2% area from below as the delayed expansion resumes later this year.

The Canadian dollar was little changed, up 5 basis points to 74.95 US.

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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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