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Roundup: Canadian stock market inches higher after CPI data

Xinhua, December 19, 2015 Adjust font size:

Canada's main stock market in Toronto Friday moved higher after data showed that the inflation rate picked up pace in November.

The Toronto Stock Exchange's benchmark Standard & Poor's/ TSX Composite Index added 14.37 points, or 0.11 percent, to 13,024.30 points, as the gains driven by resources shares offset the slump in financial shares.

The mining sector and energy sector rose 6.76 percent and 1.93 percent, respectively, after the latest national inflation data released by Statistics Canada Friday showed that the Consumer Price Index (CPI) rose 1.4 percent in November from a year earlier, after increasing 1.0 percent in October.

Lower gasoline prices continued to moderate the year-over-year rise in the CPI in November, but to a lesser extent than in October. In November, the gasoline index was down 10.6 percent year on year, compared with a 17.1 percent decrease the previous month.

Meanwhile, a recovery in the price of the crude oil and the gold futures also helped boost the resources stock in TSX.

The major gainers in TSX Friday included the gold miners and energy giants, as Barrick Gold Corporation ticked up 4.13 percent to 10.09 Canadian dollars (about 7.24 U.S. dollars), while Suncor Energy Inc. rallied 1.55 percent to 35.99 Canadian dollars per share.

The increase in inflation largely reflects the fading impact of lower energy prices on the year-on-year tally, the trend is likely to continue in the coming quarters, however, according to Leslie Preston, an economist from TD Bank, the outlook for core inflation remains quite benign.

According to the official data, the headline rate at 1.4 percent stood at the highest level this year. But conversely the core rate of 2 percent marked the slowest pace of increase so far this year.

Financials, the most influential sector in TSX, was still in the red as most of the investment institutions are worried about the momentum of the Canadian economic growth, and TD Bank has downgraded the outlook for Canada's economy over the next two years,

Given the recent drop in oil prices, the central bank "will remain cautious and monitor developments with an eye to ensuring that activity in the consumer and export sectors more than compensates for the dampening effect of the oil price shock on investment activity," Dawn Desjardins, Deputy Chief Economist of RBC Economics, said in a report on Friday.

Canada's giant banks lost ground. Royal Bank of Canada shed 0.92 percent to 74.25 Canadian dollars and Bank of Nova Scotia dropped 1.77 percent to 56.14 Canadian dollars apiece.

The Canadian dollar Friday inched higher to 0.7171 U.S. dollar at 4 pm local time, compared with 0.7168 U.S. dollar on Thursday. Enditem