TSX Today: What to Watch for in Stocks, as Canada Raises Interest Rates

The ongoing Russia-Ukraine war is keeping the global stock market highly unpredictable without any clear direction. The Canadian equities market turned positive again on Wednesday, as the TSX Composite Index inched up by 251 points, or 1.2%, to settle at 21,256.

Interest rate hike and Ukraine crisis

The geopolitical tension-driven supply concerns resulted in a third straight day of a sharp rally in crude oil prices. In spite of that, all key sectors on the TSX benchmark traded positively on March 2, with industrials, financials, consumer cyclicals, and energy sectors leading the rally.

The Bank of Canada raised the key interest rate from 0.25% to 0.5% yesterday as anticipated, marking its first rate hike in more than three years. In line with the expectations, the U.S. Federal Reserve chair Jerome Powell also indicated an interest rate hike later this month, citing a strong labour market and high inflation. While commenting on the recent Russian invasion of Ukraine, Powell stated that its “implications for the U.S. economy are highly uncertain, and we will be monitoring the situation closely.”

Significantly better-than-expected non-farm employment data from the U.S. market could be another reason for stock market gains in the last session.

Top TSX movers and active stocks

Converge Technology Solutions (TSX: CTS) stock jumped by 6.3% on Wednesday to $9.74 per share, making it the top gainer for the day on the TSX. These gains in CTS stock came a day after the Canadian software company revealed that its subsidiary Portage CyberTech has acquired the Victoria-based software firm 1CRM Systems Corp. Converge Technology expects this acquisition to help the company provide better business management solutions to its clients. Despite yesterday’s sharp gains, Converge Technology stock is still trading with more than 10% year-to-date losses.

Element Fleet Management, Secure Energy Services, Kinaxis, and Nexgen Energy were also among the top-performing TSX Composite components on March 2, as they rose by at least 5% each.

In contrast, Aecon Group, Canfor, Docebo, and Fortuna Silver Mines were the four worst-performing stocks on the main Canadian market index. While Aecon stock lost nearly 8% of its value after missing its Q4 earnings estimates, the shares of the other three companies lost at least 3% each.

TSX today

Early Thursday morning, WTI crude oil prices spiked up to their highest level since 2008 amid escalating Russia-Ukraine conflict. At the same time, copper futures prices were also trading with over 2% gains for the day. These factors could take some TSX energy and mining stocks higher at the opening today. But I expect the geopolitical uncertainties to keep the broader market extremely volatile and unpredictable.

While no major domestic economic releases are due today, Canadian investors could watch the latest jobless claims and non-manufacturing PMI data from the U.S. market this morning. The Fed chair Jerome Powell’s testimony, which started yesterday, will continue today and add to the market volatility.

The corporate events front, Toronto-Dominion Bank, Martinrea International, Artis REIT, Park Lawn, Enghouse Systems, and MEG Energy are expected to announce their latest quarterly results today.