By Ketki Saxena
Investing.com -- At the close in Toronto, the S&P/TSX Composite Index was at 19,028.86points, up 0.89% in the day’s trading.
The Canadian Index rebounded from last week’s heavy selloff and tracked global equities higher as some optimism returned to equity markets, although trading remained thin with U.S> Markets closed for the fourth of July holiday.
The Atlanta Federal Reserve's much watched GDP Now forecast slid to an annualized -2.1% for the second quarter, implying the country was already in a technical recession, and leaving investors with the hope that the Fed would dial down its hawkishness to combat inflation as the economy splutters.
U.S. non farm payrolls report this Friday is also forecast to show jobs growth slowing to 270,000 in June, with average earnings stall at around 5.0%.
Global equities also gained some optimism from reports that the White House will announce an easing of some Chinese tariffs later this week in an attempt to cool soaring consumer prices.
Canadian equities were also supported by weak economic data that had investors dialing back rate-hike bets in the context of a cooling economy; However, the persistent inflationary pressure indicated by today’s manufacturing data, and business outlook survey, seem unlikely to deter a central bank that now seems to believe that the entrenchment of soaring prices are a greater worry than the risk of recession. Money markets currently see about an 80% chance of a 75-basis point interest rate increase by the Bank of Canada in July, following a surprisingly large jump in the previous reading.
All TSX sectors were in the green at the close, although the commodity heavy Canadian index was most supported by gains in energy (+2.68%) as Crude oil for delivery in August rose 2.00% or 2.17 to hit $110.60 a barrel, while the September Brent oil contract rose 1.95% or 2.18 to trade at $113.81 a barrel.
Crude gained following news of lower output from the Organization of the Petroleum Exporting Countries (OPEC), critical to global supply in the context of sanctions on Russia. Meanwhile, unrest in Libya and Ecuador continues to curtail production, and a strike in Norway this week is set to further curb output. The TSX was also supported by gains in materials (+2.15%), which tracked gold prices higher as U.S. yields pulled back, and the dollar index continued to trade relatively flat, and remained below 105, a level it touched last week. Gold Futures for August delivery was up 0.38% or 6.80 to $1,808.30 a troy ounce.
The biggest gainers of the session on the S&P/TSX Composite were Vermilion Energy (TSX:VET) Inc . which rose 8.73% or 2.14 points to trade at 26.64 at the close. Advantage Oil & Gas Ltd. added 8.25% or 0.66 points to end at 8.66 and New Gold Inc was up 8.03% or 0.11 points to 1.48 in late trade.
Biggest losers included Dye & Durham (TSX:DND) Ltd , which lost 5.75% or 1.25 points to trade at 20.50 in late trade. Capstone Mining Corp (TSX:TSX:CS) declined 5.23% or 0.17 points to end at 3.08 and NFI Group Inc (TSX:TSX:NFI) shed 4.11% or 0.55 points to 12.84.
The S&P/TSX 60 VIX, which measures the implied volatility of S&P/TSX Composite options, was up 6.57% to 23.68.