Market Updates: Energy and Technology Stocks Push S&P/TSX Composite Index Up


A broad rally on Monday led by the energy and technology sectors lifted Canada’s main stock index, which is on track to end the volatile month of May in positive territory.

The S&P/TSX Composite Index rose 170.82 points to 20,919.40, its highest close since May 4 and a seventh straight day of gains.

“It looks like last week we finally broke that streak of weeks where equity markets were losing,” said Vincent Tonietto, portfolio manager at Fiduciary Trust Canada.

The Toronto market was also unaffected by major news from the United States, as its stock markets were closed for the Memorial Day holiday.

China’s continued easing on COVID-19 lockdowns helped support Monday’s market rise.

Utilities was the only TSX sector to fall. Energy leads the 10 sectors that rose on the day. It climbed 2.4% as crude oil prices continued to rise, helping lift Advantage Oil & Gas Ltd. by 6.2% and Tamarack Valley Energy Ltd. by 4.7%.

The July crude oil contract was up US$2.10 at US$117.17 per barrel and the July natural gas contract was down 2.6 cents at US$8.70 per mmBTU.

The rise in crude prices was supported by continued European Union talks on a ban on Russian oil imports, Tonietto said in an interview.

Oil markets are also assuming that an OPEC-Russia meeting later this week will not boost supply.

“So any ban from the European Union would only put more pressure on other suppliers around the world,” Tonietto said.

The Canadian dollar was trading at 78.98 cents US against 78.51 cents US on Friday. It is the highest level since April 21 and ahead of Wednesday’s Bank of Canada meeting, when its key interest rate is expected to rise another 50 basis points.

Consumer discretionary was the second-best sector on the day, climbing 1.7% and just ahead of technology. The rise in this sector was propelled by Hut 8 Mining Corp. which gained 11.3% while Shopify Inc. and Lightspeed Commerce Inc. rose 3.8 and 3.4% respectively.

Tonietto said long-lived stocks like technology were likely rallying to comments last week from central banks that they might not have to raise interest rates above 50 basis points.

“It gives a bit more support to stocks that have been really battered since the start of the year, and some of them are even below pre-pandemic levels, so any sign that this selloff is ending could be there. look like is a relief rally or just a technical rebound.

Materials rose slightly as bullion prices held steady. The August gold contract was unchanged at US$1,857.30 an ounce and the July copper contract rose 2.7 cents to US$4.33 per pound.

Tonietto said all eyes will be on May payrolls data to be released on Friday, in addition to ISM manufacturing numbers, Canadian GDP numbers on Tuesday and the Bank of Canada’s rate decision. Canada Wednesday.

“A lot of data will have to be digested by the markets by the end of this week.”

This report from The Canadian Press was first published on May 30, 2022.

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