On Wednesday, the Canadian market concluded the day on a strong note, driven by significant advances across the materials, energy, and technology sectors. This positive sentiment was buoyed by the Bank of Canada's decision to decrease interest rates by 50 basis points and the anticipation of a potential 25 basis points rate cut by the Federal Reserve expected the following week.
The S&P/TSX Composite Index maintained a positive trajectory throughout the trading session, ultimately closing up by 153.37 points, or 0.6%, at 25,657.70. This closing was slightly below its intraday peak of 25,674.74.
The Bank of Canada announced its choice to lower its target for the overnight rate by 50 basis points, bringing it down to 3.25%. Concurrently, the Bank Rate was set at 3.75% and the deposit rate at 3.25%.
This move follows a previous 50 basis points reduction in October, which succeeded three consecutive 25 basis points cuts earlier. The central bank reiterated that the decision aims to bolster growth and maintain inflation within the desired 1-3% range. They emphasized their commitment to evaluating the necessity of further rate adjustments "one decision at a time," basing choices on incoming data and their impact on the inflation outlook. "The Bank is dedicated to ensuring price stability for Canadians by keeping inflation near the 2% target," they stated.
The Materials Capped Index saw a rise of more than 2%, catalyzed by robust metal prices which pushed several stocks upward. Among them, Novagold (NG.TO) emerged as the top gainer, soaring over 9%, while Ssr Mining (SSRM.TO) and Equinox Gold Corp (EQX.TO) rallied impressively by 7.7% and 7.1%, respectively. Companies such as New Gold (NGD.TO), Silvercrest Metals (SIL.TO), Iamgold Corp (IMG.TO), and Kinross Gold Corp (K.TO) also experienced gains ranging from 3.6% to 6.1%.
Energy sector highlights included Baytex Energy (BTE.TO), Meg Energy Corp (MEG.TO), and others like Advantage Oil & Gas (AAV.TO) and Kelt Exploration (KEL.TO) registering gains from 2% to 3.4%.
In the technology arena, Shopify Inc (SHOP.TO) saw an increase of nearly 3.5%. Meanwhile, Celestica Inc (CLS.TO), Sangoma Technologies (STC.TO), and Constellation Software (CSU.TO) rose by 2.1%, 1.6%, and 1.3%, respectively, with Enghouse Systems (ENGH.TO) also advancing nearly 1%.
Conversely, Bausch Health Companies (BHC.TO) in the healthcare sector declined by 9% following Blackstone's decision to retract from a joint takeover bid for the eyecare firm Bausch + Lomb.
In the communications space, stocks such as Telus Corp (T.TO), BCE Inc (BCE.TO), Cogeco Communications (CCA.TO), and Rogers Communications (RCI.B.TO) faced declines within the range of 1% to 2%. Meanwhile, utility shares like Algonquin Power & Utilities (AQN.TO), Hydro One (H.TO), Innergex Renewable (INE.TO), and Canadian Utilities (CU.TO) fell by 1.7% to 2.3%.
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