Canadian Market Up Firmly In Positive Territory; BoC Raises Interest Rate

(RTTNews) - The Canadian market is up firmly in positive territory at noon on Wednesday, with stocks from across several sectors posting strong gains.

Despite worries about the tensions between Russia and Ukraine and the impact of the various sanctions on Russia, the mood in the market remains fairly positive, with investors digesting the central bank's interest rate decision and reacting to the accompanying statement.

The Bank of Canada today increased its target for the overnight rate by 25 basis points to 0.5%, hiking rates for the first time since October 2018. The central bank reiterated that it use its monetary policy tools to return inflation to the 2% target and keep inflation expectations well-anchored.

The bank also said it is continuing its reinvestment phase, keeping overall holdings of government bonds on its balance sheet roughly constant until it becomes appropriate to allow the size of its balance sheet to decline. The bank said it expects inflation to be higher in the near term than projected in January.

The Governing Council expects interest rates will need to rise further as the economy continues to expand and inflation pressures remain elevated. About the current war in Ukraine, the bank noted it is a major new source of uncertainty.

The benchmark S&P/TSX Composite Index is up 217.40 points or 1.03% at 21,221.91 a couple of minutes past noon.

In the industrials sector, Air Canada (AC.TO) is gaining 4%. Snc-Lavalin (SNC.TO), Ritchie Bros Auctioneers (RBA.TO), Toromont Industries (TIH.TO), Canadian National Railway (CNR.TO), Canadian Pacific Railway (CP.TO), Russel Metals (RUS.TO) and Mullen Group (MTL.TO) are up 2.3 to 4%.

Among the stocks in the financials sector, Laurentian Bank of Canada (LB.TO) is climbing nearly 4%, after reporting net income of $55.5 million and diluted earnings per share of $1.17 for the first quarter of 2022, compared with $44.8 million and $0.96 for the first quarter of 2021.

Bank of Montreal (BMO.TO), Bank of Nova Scotia (BNS.TO), Toronto-Dominion Bank (TD.TO) and Canadian Imperial Bank of Commerce (CM.TO) are gaining 2 to 2.6%.

Communications shares Rogers Communications (RCI.B.TO), BCE Inc (BCE.TO), Telus Corp (T.TO) and Corus Entertainment (CJR.B.TO) are up 1.4 to 1.8%.

George Weston Limited (WN.TO), up 2.3%, is the top gainer in the consumer staples section. The company reported adjusted net earnings of $347 million for the fourth quarter of 2021, an increase of $79 million, or 29.5%, compared to the fourth quarter of 2020.

Loblaw (L.TO) and Alimentation Couche-Tard (ATD.B.TO) both are up 1.5%, while Empire Company (EMP.A.TO) is advancing 1%.

Among energy stocks, Canadian Natural Resources (CNQ.TO) is climbing 2.6%. Suncor Energy (SU.TO), Crescent Point Energy (CPG.TO) and Cenovus Energy (CVE.TO) are up 1 to 1.6%.