Canada’s main stock index jumped almost 300 points Monday on the strength of a broad-based rally while U.S. stock markets were mixed.
The S&P/TSX composite index ended up 293.73 points, or 1.36 per cent, at 21,848.59.
The rise came as most sectors outside of technology saw gains, including a more than three per cent rise in the S&P/TSX energy index.
It also came as a bit of a reversal after Canadian equities have seen more pressure than the U.S. in recent weeks.
“It’s quite a strong rally for Canada compared to what’s been going on lately,” said Kevin Headland, chief investment strategist at Manulife Investment Management.
“Much of June has not been very positive for Canada, so it could be a bit of a rally off the recent bottom here.”
Investors could also be anticipating the potential for more positive news on the inflation front as Statistics Canada is set to release its latest consumer price index report Tuesday, he said.
In New York, the Dow Jones industrial average was up 260.88 points at 39,411.21. The S&P 500 index was down 16.75 points at 5,447.87, while the Nasdaq composite was down 192.54 points at 17,496.82.
Technology stocks related to computer chips were the big drag on the market as Nvidia Corp. dropped over eight per cent to wipe out hundreds of billions of dollars in market capitalization.
The drop could be largely linked to profit taking and a market reset after such strong gains recently, said Headland.
“There’s been profit taking on the chip manufacturers there, and I think Canada is just being caught up a little bit in the sell-off there.”
The Information technology index on the TSX was down about half a per cent, including Celestica Inc. down almost five per cent, while financials gained 1.7 per cent, telecoms were up 1.1 per cent and utilities were up 2.4 per cent.
The tech sell-off and profit-taking may have also carried over to bitcoin, said Headland, as it was down over seven per cent as of late Monday afternoon.
The Canadian dollar traded for 73.19 cents US compared with 72.98 cents US on Friday.
The loonie has largely held up after the Bank of Canada made its first interest rate cut in June. Anything in line or an improvement in inflation data would point to continued rate cuts in July, said Headland.
The August crude oil contract was up 90 cents at US$81.63 per barrel and the August natural gas contract was up eleven cents at US$2.95 per mmBTU.
The August gold contract was up US$13.20 at US$2,344.40 an ounce and the September copper contract was unchanged at US$4.43 a pound.