Canadian Stocks Gain Amid Increasing BoC Rate Cut Expectations

(RTTNews) - Canadian stocks edged marginally higher on Tuesday, supported by strong gains by energy and material shares as investors are pricing in rate cuts by the Canadian central bank as well as the US Fed in the second week of September. Notably, gold hit a fresh peak today.

After opening just a little lower than yesterday's close, the benchmark S&P/TSX Composite Index was volatile throughout the session before finally close at 29,063.01, up by 35.28 points (or 0.12%).

Four of the 11 sectors posted gains today, with energy stocks leading the pack.

Disappointing jobs data in both the US and Canada has bolstered expectations that the central banks of both the nations will resort to monetary easing. Notably, the BoC has maintained its current benchmark rate at 2.75% since March.

Last week, Statistics Canada had reported that unemployment climbed to 7.1% in August, the highest level in four years, exceeding market expectations of 7%. While the number of unemployed increased to around 1.595 million, youth unemployment remained elevated at 14.5%.

Sunday's decision by the OPEC+ alliance to modestly increase oil output in October by 137,000 barrels per day, the increasing threat of US sanctions against Russian oil exports, and the news of an Israeli military attacking on a Hamas delegation in Qatar, sent up crude oil prices and supported energy stocks on the upside.

Canada has been hit by US President Donald Trump with 35% tariffs on all Canadian exports (which do not fall under CUSMA) to the US since August 1. The move has punished Canadian automobile, aluminum, and steel sectors severely, resulting in huge labor losses.

Canadian Prime Minister Mark Carney is exploring ways to bring the economy back on track. In a related move, he has announced a temporary delay in the implementation of Canada's EV sales mandate which required 20% of new passenger vehicles to be sold in compliance with "zero-emission" norms. This move will ease the pressure off the automotive sector squeezed already by the US tariffs.

Carney has also announced a $5 billion relief fund to support companies across a range of sectors hit by tariffs.

Last month-end, Carney launched the new "Major Projects Office", headquartered in Calgary, to serve as a single point of contact to get nation-building projects built faster.

In the energy sector, in what is considered the second-biggest Merger and Acquisition deal, Canada's Teck Resources and London-listed miner Anglo American have announced plans to merge. In the combining new entity, shareholders of Anglo American would own 62.4%, while that of Teck Resources would own 37.6%.

Major sectors that gained in today's trading were Energy (1.55%), Financials (0.35%), Utilities (0.19%), and Materials (0.07%).

Among the individual stocks, Headwater Exploration Inc (3.92%), Energy Fuels Inc (10.40%), Teck Resources Ltd (11.53%), Tamarack Valley Energy Ltd (3.40%), Imperial Oil (2.59%), and Ero Copper Corp (3.07%) were the prominent gainers.

Major sectors that lost in today's trading were Communication Services (0.32%), Real Estate (0.32%), Healthcare (0.41%), and Industrials (0.44%).

Among the individual stocks, Brookfield Business Partners LP (4.22%), Tfi International Inc (2.50%), Bausch Health Companies Inc (1.19%), and CDN Apartment Un (2.01%) were the notable losers.