By Fergal Smith
TORONTO, Dec 20 (Reuters) – Canada’s main stock index rose on Tuesday, rebounding from a near two-month low, as a weaker US dollar bolstered the outlook for resource shares and heavily-weighted financials rallied.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 106.13 points, or 0.6%, at 19,306.89, after four straight days of declines. On Monday, it posted its lowest closing level since Oct. 25
the U.S. dollar.DXY fell against a basket of major currencies after a surprise move by the Bank of Japan to tweak its bond yield control program boosted the yen JPY=.
“A weaker US dollar is good for commodity prices, good for the TSX, good for the Canadian dollar,” said Philip Petursson, chief investment strategist at IG Wealth Management. “This is a trend I can see continuing into 2023.”
The energy sector rose 1.2%, while the materials group, which includes precious and base metals miners and fertilizer companies, was up 1.9% as gold and copper prices climbed.
Together, the two sectors account for 31% of the TSX’s weighting.
The materials group was helped by a 24.4% jump in the shares of Iamgold CorpIMG.TO after the miner sold its assets in Senegal, Mali and Guinea for $282 million to Moroccan mining company Managem MNG.CS.
In contrast, shares of First Quantum Minerals LtdFM.TO ended 5.6% lower after Panama ordered the company to make a plan to halt work at its copper mine in the country.
Financials, the sector with the heaviest single weighting on the TSX, advanced 0.7% as bond yields rose and the yield curve became less inverted.
Higher bond yields tend to increase the margins that banks earn on the cash they hold on behalf of their customers.
(Reporting by Fergal Smith; Additional reporting by Shashwat Chauhan in Bengaluru; Editing by Jonathan Oatis)
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