TSX closes at record high as markets climb 'wall of worry'

Purvi Agarwal and Fergal Smith
Updated ·2 min read
Toronto Stock Exchange's S&P/TSX composite index rises to a record high

By Purvi Agarwal and Fergal Smith

(Reuters) - Canada's main stock index closed at a record high on Thursday, led by gains for financial and resource shares, as investors cheered the Bank of England's dovish shift and a decline in long-term borrowing costs.

The Toronto Stock Exchange's S&P/TSX composite index ended up 116.67, or 0.5%, at 22,375.83, eclipsing the record closing high it notched one month ago.

The index hit the new high despite recent global geopolitical tensions and sharp swings in bond yields.

"It seems that markets keep climbing the wall of worry," said Greg Taylor, portfolio manager at Purpose Investments. "It is good to see yields are pulling back a little bit. I think that's the big win today."

The U.S. 10-year yield, a global benchmark, eased 2.6 basis points to 4.457%. It is down roughly 28 basis points from its April peak.

The Bank of England paved the way for the start of interest rate cuts as soon as next month.

"The Bank of England was a little more dovish in signaling that rate cuts are coming. I think that's just a reminder that the Bank of Canada is probably going to be following the same path in the near term," Taylor said.

The materials group, which includes metal miners and fertilizer companies, was up 2.2% as gold and copper prices climbed.

Nutrien Ltd, the world's biggest fertilizer producer, beat first-quarter profit estimates on strong demand for crop nutrients. Its shares added 4.5%.

The price of oil also rose, settling 0.3% higher at $79.26 a barrel. Energy added 0.7%, while heavily weighted financials were up 0.6% as Manulife Financial Corp shares gained 4.7% after the insurer reported better-than-expected quarterly profit.

Auto parts manufacturer Linamar Corp was another standout. Its shares jumped 6.8% after the company's first-quarter sales beat analysts' expectations.

(Reporting by Fergal Smith in Toronto and Purvi Agarwal in Bengaluru; Editing by Shilpi Majumdar and Matthew Lewis)

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