By Fergal Smith
(Reuters) -Canada’s foremost inventory index prolonged its November positive factors on Friday, shifting to a brand new document excessive, with know-how and industrial shares rising as traders welcomed larger readability concerning the financial outlook following the end result of the U.S. election.
The S&P/TSX composite index ended up 104.48 factors, or 0.4%, at 25,648.00, eclipsing the document closing excessive it posted on Thursday. For the month, it was up 6.2%, its fifth straight month-to-month acquire and the most important since November final 12 months.
“We have climbed that wall of fear,” mentioned Greg Taylor, portfolio supervisor at Goal Investments.
“There was plenty of nervousness heading into the (U.S.) election and now we have got not less than extra readability with what is going on on. We have extra confidence that there is going to be some extra progress points within the U.S. and that ought to assist earnings because the economic system retains going and regulation falls again.”
U.S. President-elect Donald Trump has pledged to chop taxes and loosen enterprise rules.
Whereas these measures may enhance the economic system, the potential for larger fiscal deficits underneath the Trump administration, in addition to inflationary tariff and immigration insurance policies, may scale back prospects for Federal Reserve rate of interest cuts and lift long-term borrowing prices, say analysts.
“The large factor everybody goes to be watching is simply what occurs with (bond) yields and the (U.S.) greenback going ahead, as a result of if yields and the greenback preserve going larger that is going to be a fairly large headwind,” Taylor mentioned.
The Canadian greenback posted its third straight month-to-month decline in opposition to its U.S. counterpart in November as Canada’s economic system grew simply 1% within the third quarter, prompting traders to boost bets on one other outsized rate of interest lower from the Financial institution of Canada.
The know-how sector added 1% on Friday and industrials had been up 0.5%. Seven of 10 main sectors ended larger.
