The Canadian stock market rallied on Wednesday, despite the Bank of Canada’s (BoC) decision to hike interest rates by 25 basis points, as investors reacted positively to the cooler-than-expected U.S. consumer inflation numbers. The S&P/TSX Composite Index inched up by 192 points, or 1%, for the day to 20,071, delivering its best single-day performance in July so far.
Despite weakness in some healthcare and consumer cyclical shares, all other key sectors on the TSX ended the last session in the green territory, with mining, real estate, utilities, and tech stocks leading the market rally.
Another policy rate hike from the Banks of Canada
While announcing its decision to hike the policy rate for the third time in 2023, the Canadian central bank noted that the “excess demand and elevated core inflation are both proving more persistent.” In his press conference, BoC Governor Tiff Macklem said, “We are trying to balance the risks of over- and under-tightening.” However, he indicated that, if needed, the central bank may increase the policy rate further to achieve its 2% inflation target.
Top TSX Composite movers and active stocks
Laurentian Bank of Canada (TSX: LB) zoomed up 26.6% yesterday to $42.46 per share, making it the top-performing TSX stock for the day. These massive gains in LB stock came a day after the Montréal-headquartered financial services provider told investors that “its board of directors and management team are conducting a review of strategic options to maximize shareholder and stakeholder value.”
Laurentian Bank also highlighted in a press release that since the launch of its three-year strategic plan in December 2021, it has been suppressing all its financial goals, despite macroeconomic challenges. On a year-to-date basis, LB stock is now up 31.5%.
Endeavour Silver, Fortuna Silver Mines, and First Majestic Silver were also among the top performers on the Toronto Stock Exchange, as they jumped by at least 8.8% each.
In contrast, shares of Aritzia (TSX: ATZ) crashed nearly 24% in the last session to $25.58 per share, as its latest quarterly results and updated outlook seemingly disappointed investors. In the quarter ended in May 2023, the Vancouver-based apparel retailer’s adjusted earnings fell 71.4% year over year to $0.10 per share.
While its quarterly earnings figure exceeded analysts’ expectations, a recent deceleration in Aritzia’s traffic trends forced it to cut its revenue in gross profit margin outlook for its fiscal year 2024. With this, ATZ stock has now seen 46% value erosion in 2023 so far.
Telus International and Advantage Energy were also among the bottom performers, as they plunged by at least 3.4% each on July 12.
Based on their daily trade volume, Enbridge, Canadian Natural Resources, Athabasca Oil, and Cenovus Energy were the most active TSX stocks for the day.
TSX today
Metals prices across the board were extending yesterday’s rally early Thursday morning, which could help the commodity-heavy TSX index trade positively at the open today.
While no major domestic economic releases are due, weekly jobless claims data and wholesale inflation report from the United States will remain on Canadian investors’ radar this morning.
On the corporate events side, Cogeco Communications is set to announce its May quarter results on July 13. Bay Street analysts expect the Montréal-based telecommunications firm to report adjusted quarterly earnings of $2.01 per share with $736.7 million in revenue.
Market movers on the TSX today
