Canada’s main stock index rebounded on Monday from a three-month low as investors rotated out of high-flying technology shares into resource and financial shares at the approach of quarter-end.
The Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE), ended up 169.09 points, or 0.9%, at 19,587.32, after posting on Friday its lowest closing level since mid-March.
“You have seen a bit of an oversold bounce in some of the more value-orientated sectors of the market,” said Mike Archibald, a portfolio manager at AGF Investments.
“Clearly there was a rotation today out of technology …. some of that money rotated itself back into the resource space.”
The energy group rose 2.1% as oil settled 0.3% higher at $69.37 a barrel. Investors balanced concerns about global demand growth for oil against upcoming supply disruptions that could be exacerbated by political instability in Russia.
Heavily weighted financials also gained ground, rising 1.1%, and the interest-rate sensitive real estate sector was up 1%.
The TSX was still on track to post a quarterly decline after two straight quarters of gains, as concerns over a global economic slowdown and elevated interest rates weigh on investor sentiment.
Canada’s consumer price index data, due on Tuesday, could guide expectations for an additional interest rate hike by the Bank of Canada in July. It is expected to show inflation slowing to 3.4% in May after a surprise uptick to 4.4% in April.
