Stocks in Canada rallied for a third day to an all-time high in two weeks. Market analysts have attributed this to the gains in the energy and consumer sector.
Canadian Stocks Rally For Third Day As Financial and Energy Sectors Gain
On March 24, RMP Energy Inc. and Penn West Petroleum Ltd rallied by as much as 5.6% leading shares in the energy sector to three straight gains in a row. At the same time, Metro Inc. gained 2.6% to lead gains in consumer goods shares. Eldorado Gold Corp, whose shares rallied 4.3% as gold prices increased in two consecutive weeks, demonstrated the biggest rally in a month.
In Toronto, the Standard & Poor/Toronto Stock Exchange Index increased by 0.8% or by 124.05 points to settle at 15,081.26. In the past three sessions, the index increased by 1.4% and extended this year’s total gains to 3.1%.
As a group, energy shares rallied by 1.4% while Canadian Natural Resources rallied by 1.6% and Penn West rose 5.9%. On the S&P/TSX, eight out of ten sectors increased their trading capacity 14% lower compared to the 30-day trading average.
Eldorado Gold rose 4.1% while Yamana Gold Inc rallied 2.4%. Overall, gold shares increased 0.3%, the highest level in two weeks, and garnered at $1,191.40 per ounce amidst anticipation that policy makers in the U.S. would postpone interest rate hikes until toward the end of this year.
First Quantum Minerals Ltd. and Teck Resources Ltd. lost 2.1% each while copper stopped its fourth day of consecutive gains. China’s preliminary Purchasing Managers’ Index from Markit Economics and HSBC Holdings Plc for the month of March settled at 49.2, while it was at 50.7 in February. A contraction is certainly imminent for figures less than 50.
Alimentation Couche-Tard Inc. rose 4% while Loblow Cos rallied 2.5% amidst increased consumer goods stocks, which, as a group, rose 2.8% to a record high.
As the S&P/TSX Banks Index increased for a third day, the Royal Bank of Canada rallied 0.4% while Dominion Bank Toronto rose by 0.6% and by 1.7% as a group.
A private survey indicated that activity in the Chinese factory sector declined to an all-time low in 11 months, in the month of March.
Due to a weaker greenback and buoyed by less hawkish comments by the Federal Reserve pertaining to the interest rate hikes, the past week has seen a rebound of commodity prices. U.S. crude oil prices rallied lightly.
According to John Ing, the Maison Placements Canada President, “The weakening of the U.S. dollar is providing a lift. The Fed’s comments over rates are generally having a rose-colored impact over the market.”
He added, “Bull markets thrive in worry. However, I have no doubt that the markets are richly valued.”
Stocks to watch out for in Canada include:
Dollarama Inc, the dollar-store retailer. Its fourth quarter profits amounted to 76 Canadian cents per share, up from 59 Canadian cents in the last fiscal year. The operator raised dividends amidst sales growth increase of 8.5%.
Other stocks to look out for include AGF Management whose total assets increased C$36.1 billion a year earlier to C$36.7 billion.
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