S&P/TSX composite posts gain Monday on energy strength, U.S. markets also rise

Rosa Saba, The Canadian Press

TORONTO — Canada’s main stock index began the week by posting a gain of more than 130 points, fuelled by strength in energy stocks, while U.S. markets also rose. 

The S&P/TSX composite index was up 131.71 points at 19,519.43.

In New York, the Dow Jones industrial average was up 382.60 points, or 1.2 per cent, at 32,244.58.The S&P 500 index was up 34.93 points at 3,951.57, while the Nasdaq composite was up 45.03 points at 11,675.54.

It was the first trading day after a volatile week that saw markets zigzag from day to day after two U.S. banks closed and fears of contagion were further fanned by the struggling Credit Suisse and First Republic Bank. 

Some of last week’s uncertainty was alleviated by the news that embattled lender Credit Suisse is being bought by banking giant UBS, said Mona Mahajan, senior investment strategist with Edward Jones. 

And some of the pressure in yields was alleviated as they ticked higher Monday, said Mahajan, adding that markets are waiting for the Federal Reserve’s next rate decision mid-week.

But though U.S. regional banks rallied Monday, First Republic Bank is still struggling, she said, with the bank’s stock price down more than 47 per cent Monday. 

“Financials weren’t the top performing sector, but they did close in the green, which was also a good sign,” Mahajan said. 

The central bank has a delicate balance to strike, she said, of needing to be tough on inflation while also being sensitive to the volatility caused by last week’s crisis of confidence in the financial sector.

The roller-coaster of a week saw market expectations for the Fed’s decision shift, and it looks like a quarter-percentage-point hike is the most likely scenario, Mahajan said, followed by strong messaging about the banking crisis.

Tech stocks rallied last week on hopes that rate hikes would soon slow or stop altogether, posting a gain of 4.4 per cent from the previous week. But on Monday the gains in tech were more subdued, with the Nasdaq up just 0.4 per cent compared with stronger gains on the other U.S. indexes.

Meanwhile in Canada, the latest inflation data will be released Tuesday and is expected to show a continuation of the gradual cooling in price growth, Mahajan said. 

The Canadian dollar traded for 73.13 cents US compared with 72.81 cents US on Friday.

The May crude contract was up 89 cents at US$67.82 per barrel and the April natural gas contract was down 12 cents at US$2.22 per mmBTU.

The April gold contract was up US$9.30 at US$1,982.80 an ounce and the May copper contract was up six cents at US$3.95 a pound.

This report by The Canadian Press was first published March 20, 2023.

Companies in this story: (TSX:GSPTSE, TSX_CADUSD=X)

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