Toronto stock prices reach record highs after bank earnings

Canada’s main index of stocks hit a new record on Wednesday. This was largely due to the performance of technology and financial companies, as well as investors’ assessment of strong quarterly earnings by two major domestic lenders.

The Toronto Stock Exchange S&P/TSX Composite Index was up 28.72, or 0.11% at 25,664.45, but was still trading below its record high.

Angelo Kourkafas is an investment strategist with Edward Jones Investments.

I would say that the market is showing some hesitation in light of last month’s significant gains.

TSX’s heavyweight financial sector gained 0.2%. Royal Bank of Canada gained 1.2% after exceeding analyst expectations for its fourth-quarter profits, thanks to its acquisition of HSBC’s domestic business in this year, and strong wealth division.

RBC still set aside more money than anticipated for possible soured loans. This indicates that clients have struggled to pay off their credit cards and mortgages despite numerous rate cuts across Canada.

National Bank of Canada reported an increase in its quarterly profit due to its wealth management division, despite its stock falling 3.4%.

Bitfarms led the sector with a 5.3% increase after Alliance Global Partners began coverage of the blockchain farm operator. The rating was “buy”.

Dollarama’s 4.3% decline in sales pushed down consumer discretionary by 1% despite Dollarama reporting higher third-quarter profits and sales.

Energy sector dropped by 1.1%. Baytex Energy fell over 5% as two brokerages reduced their target prices.

The headline Canadian business activity index increased to 51.2 in November from 50.4, its highest level since the beginning of April 2023.

The focus south of the border shifted towards Fed Chair Jerome Powell’s comments made later that day, and the November monthly employment report on Friday for further clues about the U.S. Federal Reserve’s interest rate path.

The traders now assign a 72.7% probability of a cut in the Fed’s policy on December 17-18. (Reporting and editing by Nikhil Sharma, Ragini Mathur)

(source: Reuters)