TORONTO (Reuters) - Canada’s main stock index rose in a broad but shallow rally on Tuesday, while caution remained a dominant theme on global markets as investors wait to see if the U.S. Federal Reserve will hike interest rates for the first time in nearly a decade.
“Day to day it’s tough to see which way this market’s going,” said Allan Small, a senior investment adviser at HollisWealth, who said trading volumes were muted.
He said a spike in U.S. Treasuries yields could suggest increased bets on a Fed hike when it meets later this week, and that a rise could be the vote of confidence investors need to push stocks higher.
In that scenario, Small said overall Canadian market gains will be less pronounced than in U.S. markets, which are not as heavily stacked with resource stocks weighed down by limping crude oil prices.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 109.37 points, or 0.82 percent, at 13,462.71. All 10 main sectors rose, with utilities jumping 2.5 percent and industrials up 1.6 percent. The index had hit a peak above 15,500 points in April.
The market’s fall presents a buying opportunity for those who are confident that the neighboring North American economies will improve in the second half of the year.
“We’re taking advantage of the market correction to put cash to work,” said Barry Schwartz, portfolio manager at Baskin Financial Services. “I‘m like a kid in a candy store. In my opinion the problem is my mommy has only given me a dollar to spend.”
The most influential movers on the index included Valeant Pharmaceuticals International (VRX.TO), a large weight and erratic stock, which gained 2.4 percent to C$302.53.
The financials group climbed 0.7 percent, with Royal Bank of Canada (RY.TO) up 0.8 percent to C$73.20 and Manulife Financial Corp (MFC.TO) gaining 1.5 percent to C$20.55, while energy shares gained a quarter-percent overall.
Baskin’s Schwartz said he was avoiding oil and gas companies because volatility in crude markets was making valuating them difficult.
U.S. crude CLc1 prices rose 2 percent to $44.87 a barrel, while Brent crude LCOc1 added 0.5 percent to $46.60.[O/R]
Editing by Bernadette Baum and Dan Grebler