The Toronto Stock Exchange’s benchmark S&P/TSX composite index rallied decisively Monday, climbing 157.63 points to close at 22,438.12 as technology firms and mining companies led a broad-based advance that energized Canadian markets.
Investors poured into Canadian equities following last week’s volatility, with nine of the TSX’s 11 major sectors finishing in positive territory. Tech stocks emerged as standout performers, surging 2.4% collectively as companies like Shopify and Constellation Software posted significant gains.
“What we’re seeing is a classic relief rally after several days of uncertainty,” said Michael Chen, chief investment strategist at Vancouver-based Pinnacle Wealth Management. “The tech sector’s performance suggests institutional investors are rotating back into growth stocks after recent pullbacks created attractive entry points.”
The materials sector added substantial weight to the day’s gains, climbing 1.8% as gold and copper prices strengthened on renewed optimism about global industrial demand. Mining giants like Barrick Gold and Teck Resources saw their shares advance between 2.3% and 3.1%.
Meanwhile, south of the border, Wall Street indices mirrored Canada’s upward momentum. The Dow Jones industrial average rose 230.65 points to 39,843.71, while the S&P 500 added 38.42 points at 5,473.23. The tech-heavy Nasdaq composite completed the positive picture, gaining 165.77 points to finish at 17,857.00.
The Canadian dollar strengthened against its U.S. counterpart, trading for 73.26 cents US compared to 73.11 cents US on Friday, bolstered by rising commodity prices and the broader market optimism.
Energy stocks on the TSX added modest gains despite fluctuating oil prices. West Texas Intermediate crude settled at $82.47 per barrel, up 0.3% as traders assessed conflicting signals about global supply and demand dynamics.
“The resilience we’re seeing in Canadian energy stocks speaks to the sector’s relative value compared to U.S. counterparts,” noted Sophia Williams, portfolio manager at CO24 Investment Partners. “Many of these companies are generating substantial free cash flow even at current oil price levels.”
The financial sector, which accounts for roughly 30% of the TSX’s weighting, climbed 0.8% as major Canadian banks continue to demonstrate stability amid changing interest rate expectations. Royal Bank of Canada and TD Bank Group shares advanced 0.9% and 1.1% respectively.
Only two sectors bucked the positive trend – utilities and real estate, which dipped 0.4% and 0.2% respectively. These interest-rate sensitive sectors remain under pressure as investors continue to adjust expectations about the Bank of Canada’s monetary policy timeline.
Looking ahead, market participants will be closely monitoring upcoming inflation data and central bank commentary for clues about the direction and timing of potential interest rate cuts. Statistics Canada is set to release May’s Consumer Price Index figures on Wednesday, which could significantly influence market sentiment.
“This rally has legs if inflation continues to moderate and corporate earnings maintain their resilience,” said Williams. “But investors should remain selective – not all sectors will benefit equally from the current macroeconomic environment.”
Trading volume on the TSX reached 256.3 million shares, approximately 12% higher than the 20-day moving average, indicating strong participation across the market.
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