Update: Friday Rally Pushes Canada's TSX 27 Points Higher, Paced by Financials and Materials

Update: Friday Rally Pushes Canada's TSX 27 Points Higher, Paced by Financials and Materials

Canada’s main stock market rallied Friday, recovering from Thursday’s triple digit losses. The S&P/TSX Composite Index added 27 points or 0.2% to close at 16,043 today. U.S. markets posted even better results, particularly the Nasdaq, up more than 1%. On Wednesday, the TSX reached a record high of 16,136 but was little changed for the week.

Financials and materials led gainers today, climbing 0.3% and 0.6%, respectively. Tech and consumer stocks were also stronger, while energy lost 1% even as oil prices posted modest gains. Gold, silver and copper also showed some strength.

In stock news, shares in Florida-based railroad CSX ( CSX ) plunged Friday morning after it announced president and CEO Hunter Harrison, formerly of CN Rail and CP Rail, is on medical leave due to what it calls “unexpected complications from a recent illness.” CSX shares were off 7% in late Friday trading. Linamar (LNR.TO) jumped 11% after the auto parts company announced plans to purchase Winnipeg-based agriculture manufacturer MacDon for $1.2 billion. Heavily traded Bombardier (BBD-B.TO) climbed a penny while Manulife Financial (MFC.TO) rose 1.5% after becoming the first insurer in the world to issue a green bond, worth US$368 million. Royal Bank (RY.TO), one of the day’s most influential shares, gained 0.5%.

In economic news, manufacturing shipments fell 0.4% in October after a revised 0.4% m/m gain in September (was +0.5%). A 5.0% drop in transportation equipment sales drove the decline in total shipments during October. Transport was in turn led by motor vehicle industry sales, which plummeted 6.7%, partly due to shutdowns at some assembly plants in October. Excluding sales of motor vehicles and other transportations equipment leaves a 0.5% gain in manufacturing sales values. Total sales volume tumbled 1.5% in October, leaving ample downside risk to the 0.2% October GDP estimate. The unexpected decline (analysts projected a 1.0% gain) in total sales and sizable drop in sales volumes is supportive of the BoC taking a slow, cautious approach to interest rates, perhaps providing some relief to rising yields.

The Canadian dollar lost nearly half-a-cent to 77.69 US.

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