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TSX gets a bump after oil prices reach one-week high

Nivedita Balu
Updated ·2-min read
The Toronto Stock Exchange sing is seen in Toronto

By Nivedita Balu

(Reuters) - Canada's main stock index rose on Monday boosted by a jump in oil prices as investors readied for crucial U.S. inflation data and the Federal Reserve's monetary policy meeting due later this week.

The Toronto Stock Exchange's S&P/TSX composite index was up 62.76 points, or 0.3% , at 22,069.76.

Oil prices climbed about 3% to a one-week high buoyed by hopes of rising fuel demand this summer.

The high oil prices boosted Toronto's energy index up 1.4%.

"Over the last several weeks we have seen a sizable pullback in oil prices... the theory is that pullback was likely overdone, and now we're seeing oil prices go back to about the average price that has been trading over the past 12 months," Angelo Kourkafas, senior investment strategist at Edward Jones.

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Investors drew a cautious stance ahead of Wednesday's U.S. consumer prices data and the Fed's monetary policy meeting, which could drive market action and determine the country's timing and scope of monetary policy easing this year.

"It is going to be a very big week on the macro front in the U.S., which no doubt will impact the Canadian markets. There's no expectation for the rate cut by the Fed, but the focus is going to be on the updated summary to economic projections," Kourkafas said.

While the Bank of Canada (BoC) has already initiated monetary policy easing with a 25 basis points cut last week, investors are betting on a near 51% probability that the Fed will start rate cuts in September. [0#FEDWATCH]

Meanwhile, Canada's manufacturing sales data and wholesale trade numbers for the month of April are scheduled for release on Friday.

The materials sector, which includes metals miners and fertilizer companies, followed with a 1.3% climb, supported by higher prices of most metals, including gold and copper. [GOL/] [MET/L]

In corporate news, Bitcoin miner Bitfarms dropped 3.6% after it approved the adoption of a "poison pill" to fend off a potential hostile takeover attempt by rival Riot Platforms.

(Reporting by Khushi Singh in Bengaluru and Nivedita Balu in Toronto; Editing by Shreya Biswas and Josie Kao)