TSX rebounds from 3-month low as bond yields ease
- Canada's main stock index, the S&P/TSX composite index, rallied on Thursday, gaining 0.8%
- The financial and technology sectors contributed to the gains
- The recent rapid rise in borrowing costs lost some momentum, leading to the rebound in stock prices
- Energy stocks were more restrained, with gains of only 0.1% as oil prices fell
Canada's main stock index rallied on Thursday, including gains for the financial and technology sectors, as the rapid move higher in long-term borrowing costs in recent weeks lost some momentum.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended up 154.76 points, or 0.8%, at 19,590.74, after posting on Wednesday its lowest closing level in three months.
"It's been a challenging month for equities, with factors such as rising yields, sticky inflation, continued economic uncertainty and a looming U.S. government shutdown casting its shadow on financial markets," said Brandon Michael, a senior investment analyst at ABC Funds.
"I think the market is waiting for yields to stabilize. Until they stabilize, markets should remain volatile. But it does seem the market has reached a short-term trough just based on the technical indicators."
Canada's 10-year yield eased 3 basis points to 4.065% after earlier touching its highest level since December 2007 at 4.165%.
Wall Street's main indexes also rebounded as Treasury yields steadied ahead of a key inflation report on Friday.
The Toronto market's heavily-weighted financials sector rose 1.1%, technology added 1.3% and the materials group, which includes precious and base metals miners and fertilizer companies, ended 1.2% higher.
Gains for energy were more restrained. The sector added 0.1% as oil settled 2.1% lower at $91.71 a barrel, giving back some of its recent advance.
Canadian economic data is also awaited on Friday. It is expected to show GDP rebounding 0.1% in July after declining 0.2% in June.