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Updated January 27th, 2024 at 14:07 IST

Toronto stock market records 1% weekly gain driven by tech sector surge

The S&P/TSX composite index concluded the day up by 0.1 per cent at 21,125.28, notching a 1.0 per cent gain for the week.

Business Desk
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Canada's primary stock index, the Toronto Stock Exchange's S&P/TSX composite index, closed higher on Friday, propelled by gains in the technology and energy sectors. The market's upward momentum this week has elevated the index to its highest closing level since May 2022, marking a 20-month high. The S&P/TSX composite index concluded the day up by 0.1 per cent at 21,125.28, notching a 1.0 per cent gain for the week.

Lorne Steinberg, President of Lorne Steinberg Wealth Management Inc., highlighted the dominant role of the technology and information services sectors in driving market performance. He noted that these sectors are among the few demonstrating robust growth globally.

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The technology sector witnessed a significant rally, surging by 0.8 per cent, contributing to the overall market gains. The energy sector also experienced a 0.4 per cent increase, buoyed by higher oil prices. Crude futures settled 0.8 per cent higher at $78.01 a barrel, influencing positive movements for pipeline companies, known for their high dividend payouts.

Steinberg explained that the positive trend in pipeline stocks is influenced by the perception that even if interest rates don't decline rapidly, there is an expectation that they might be cut at some point in the future.

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The slight rise in US prices in December has fueled expectations that the Federal Reserve may initiate interest rate cuts in the coming year. Additionally, the Bank of Canada indicated a shift in focus towards contemplating when to reduce borrowing costs, rather than considering further rate hikes.

However, the materials group, encompassing precious and base metals miners along with fertiliser companies, lagged behind, experiencing a 0.5 per cent decline due to a drop in gold prices.

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The market's positive performance this week reflects the resilience and optimism prevailing in the Canadian stock landscape, with various sectors contributing to the overall upward trajectory.

(With Reuters inputs)

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Published January 27th, 2024 at 14:07 IST

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