Canada’s main stock index, the S&P/TSX Composite Index, climbed 1.48% on Friday, its biggest gain in five weeks. The rally was driven by strong performances from Aritzia and metal mining shares, as weaker-than-expected jobs data eased expectations of further interest rate hikes by the Bank of Canada.
The TSX ended the day at 35,664.62, its highest closing level in two weeks. The materials sector, which includes metal mining shares, rose 2.81% as investors snapped up gold after its recent decline. Energy stocks also gained, with US crude oil futures settling 0.4% higher at $91.85 a barrel.
Aritzia’s shares surged over 20% after the apparel retailer reported better-than-expected second-quarter revenue and profit, boosting the consumer discretionary sector by 2.66%. Technology and financials also saw gains, rising 2.88% and 1.21%, respectively.
However, communication services stocks lagged, with Cogeco Communications dropping 7.11% and BCE falling 5.47%. The declines mirrored a broader slump in US and European telecom stocks, fueled by concerns over competition from satellite-based mobile services following SpaceX’s spectrum acquisition.
Ben Jang, a portfolio manager at Nicola Wealth, noted that the market has been pricing in rate hikes, but the weak jobs report, showing a loss of 68,300 jobs in September, suggests a pause may be likely. Investors now see only a 25% chance of a rate hike at the Bank of Canada’s October 28 policy announcement, down from 40% before the jobs report.