The Canadian market made a noticeable upward movement during early trading on Wednesday. However, these gains slightly retracted following the anticipated decision by the Bank of Canada to lower its benchmark interest rates by 50 basis points.
In the financial landscape, materials and technology stocks stood out as significant gainers, while sectors such as healthcare, communications, and utilities experienced a downturn.
Earlier in the session, the S&P/TSX Composite Index reached a peak of 25,631.55 but was recorded at 25,585.69, marking an increase of 81.36 points or 0.32% at the time of this report.
The Bank of Canada announced its decision to cut the overnight rate target by 50 basis points to 3.25%, setting the Bank Rate at 3.75% and the deposit rate at 3.25%.
This policy move follows a previous reduction of 50 basis points in October, which itself followed three consecutive 25 basis point cuts. The central bank emphasized that these rate reductions aim to stimulate economic growth while maintaining inflation within the 1-3% target range.
Future rate adjustments, the bank indicated, will be assessed on a case-by-case basis. The Bank affirmed its commitment to price stability by keeping inflation close to the 2% target, driven by ongoing analysis of emerging economic data.
The statement also highlighted the increased uncertainty in the economic outlook due to potential U.S. tariffs on Canadian exports introduced by President-elect Donald Trump’s administration.
Within the Materials Index, Novagold (NG.TO) emerged as the leading gainer, appreciating nearly 6%. Ssr Mining (SSRM.TO) rose by 5.7%, while Aya Gold and Silver (AYA.TO) went up by 4.5%. Other noteworthy performers include Pan American Silver Corp (PAAS.TO), Calibre Mining (CXB.TO), Orla Mining (OLA.TO), and several others, showing increases ranging from 3 to 4%.
In the technology sector, Sangoma Technologies (STC.TO), Constellation Software (CSU.TO), Quarterhill (QTRH.TO), Bitfarms (BITF.TO), and Celestica Inc (CLS.TO) experienced gains between 1% to 1.7%.
Roots Corporation (ROOT.TO) enjoyed a significant rise of 10.3% following the announcement of a net income of $2.4 million for the third quarter, compared to the previous year's $0.5 million.
Conversely, in the healthcare sector, Tilray Inc (TLRY.TO) fell by 4.4%. Bausch Health Companies (BHC.TO) experienced a more pronounced decline of over 10% after Blackstone decided against proceeding with a joint takeover bid for Bausch + Lomb, an eyecare firm.
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