TSX rises as higher gold, crude prices boost mining, energy shares
Recasts with fresh quotes, analyst comments
By Nikhil Sharma and Promit Mukherjee
Nov 18 (Reuters) -Canada's main stock index rose on Monday, boosted by mining and energy companies that gained on the back of higher gold and oil prices respectively.
The S&P/TSX composite index .GSPTSE closed up 74.51 points, or 0.3%, at 24,965.19.
Gold prices rose sharply on Monday as investors looked for a safe haven to park money after the Russia-Ukraine war escalated. The stalled U.S. dollar, which has been rising for the past few weeks, added to the bullion demand.
Spot gold XAU= jumped 1.84% to $2,608.57 per ounce, helping basic materials or mining companies .GSPTTMT post an increase of 2.32%.GOL/
"Gold is performing strongly, and with the Canadian economy being heavily resource-driven, it's providing a boost to the TSX today," said Shiraz Ahmed, senior portfolio manager and founder of Sartorial Wealth at Raymond James.
The U.S. decision to authorize long-range Ukrainian strikes into Russia pushed crude oil prices higher, with the Brent crude price LCOc1 rising 3.15% to $73.28 per barrel.
The energy sector .SPTTEN, which accounts for over 17% of the total composite-index weight, advanced by 0.8% due to higher oil prices.
The TSX has risen almost 20% this year due to a raft of factors such as expectations of lower interest rates, geopolitical concerns and anticipation of the U.S. elections.
Many analysts see the valuations over-stretched and expect the market to fall to a more reasonable level but see the timing as uncertain.
"I don't know when it's going to happen but certainly we are going to have a correction at some point," said Michael Sprung, president at Sprung Investment Management.
The boost markets received from the anticipation of interest-rate cuts is fading away, he said.
Canada will release consumer-price data on Tuesday and economists expect the numbers could help determine the size of the expected rate cut by the Bank of Canada next month.
Canadian housing starts rose 8% in October, compared with the previous month, as groundbreaking increased on multi-unit and single-family detached homes.
The Nasdaq and S&P 500 closed higher, recovering some losses as investors anticipated quarterly earnings from AI leader Nvidia NVDA.O, while Tesla TSLA.O jumped on the prospect of favorable policy changes from the incoming U.S. administration.
Reporting by Nikhil Sharma in Bengaluru; Editing by Shreya Biswas and Rod Nickel
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