Canadian stocks are up in positive territory Wednesday morning with investors reacting to the Bank of Canadas decision to reduce interest rates by 0.25 basis points for the third straight month.
Healthcare, real estate and communications shares are among the prominent gainers. Several stocks from utilities and consumer discretionary sectors are also notably higher. Energy stocks are a bit weak.
The benchmark S&P/TSX Composite Index was up 90.87 points or about 0.4% at 23,133.32 a little while ago.
As widely expected, the Bank of Canada announced that is decided to lower interest rates by a quarter point for the third straight meeting.
The Canadian central bank reduced its target for the overnight rate by 25 basis points to 4.25%, with the Bank Rate at 4.5% and the deposit rate at 4.25%. The central bank said it decided to continue lowering rates due to continued easing in broad inflationary pressures.
The accompanying statement noted inflation slowed further to 2.5% in July, with high shelter price inflation starting to slow.
Excess supply in the economy continues to put downward pressure on inflation, while price increases in shelter and some other services are holding inflation up, the Bank of Canada said.
Governing Council is carefully assessing these opposing forces on inflation, the bank added. Monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook.
The Bank of Canada noted the economy grew by 2.1% in the second quarter, led by government spending and business investment, and added that the labor market continues to slow, with little change in employment in recent months, but noted wage growth remains elevated relative to productivity.
Healthcare stocks Bauch Health Companies (BHC.TO), Sienna Senior Living (SIA.TO) and Tilray Inc (TLRY.TO) are gaining 2.5%, 1.5% and 1.3%, respectively.
Cameco Corporation (CCO.TO), Bombardier Inc (BBD.A.TO) and TerraVest Industries (TVK.TO) are up 3 to 4%.
Cargojet (CJT.TO), Canadian Tire Corporation (CTC.A.TO), Nutrien (NTR.TO), iA Financial Corporation (IAG.TO), Boardwalk Real Estate Investment (BEI.UN.TO), EQB Inc (EQB.TO), goeasy (GSY.TO), Kinaxis Inc (KXS.TO) and FirstService Corporation (FSV.TO) are gaining 1 to 3%.
Stantec Inc (STN.TO), Endeavour Mining (EDV.TO), Suncor Energy (SU.TO), Newmont Corporation (NGT.TO), Celestica Inc (CLS.TO) and Molson Coors Canada (TPX.B.TO) are down 1 to 2.2%.
Data from Statistics Canada said Canada recorded a trade surplus of C$ 0.68 billion in July 2024, the first since February, following a downwardly revised deficit of C$ 0.18 billion in June. Exports dropped by 0.4% to C$ 65.7 billion, while imports fell by 1.7% to C$ 65 billion.