FX.co ★ TSX Posts Record Closing High On Soft Inflation Data

The Canadian market surged to new intraday and closing highs on Tuesday, buoyed by soft inflation data that heightened anticipation of an interest rate cut by the Bank of Canada next week.

Optimism was further fueled by the possibility of an interest rate cut by the Federal Reserve in September, contributing to the upbeat atmosphere on Bay Street.

The S&P/TSX Composite Index closed with a substantial gain of 243.71 points, or 1.07%, finishing at 22,995.39, just shy of the day's peak at 22,996.14.

Among the top performers were technology, materials, and consumer discretionary stocks. The session also saw gains in industrials, real estate, and healthcare sectors.

The Information Technology Capped Index rose by 3.12%. Notably, Shopify Inc. (SHOP.TO) soared over 8.5% following an upgrade to a "buy" rating by BofA Global Research. Bitfarms (BITF.TO) spiked by 7.4%, while Coveo Solutions (CVO.TO) increased by 4.7%. Other notable gains included Converge Technology Solutions (CTS.TO), Tecsys Inc. (TCS.TO), and Celestica Inc. (CLS.TO), which climbed between 3.3% and 3.75%.

The Materials Capped Index advanced by 2.04%, led by Novagold (NG.TO) which surged 7.3%. Several other stocks, including Canfor Corp (CFP.TO), First Majestic Silver Corp (AG.TO), MAG Silver Corp (MAG.TO), Ssr Mining Inc. (SSRM.TO), Barrick Gold Corp (ABX.TO), Wheaton Precious Metals (WPM.TO), Pan American Silver Corp (PAAS.TO), B2Gold Corp (BTO.TO), Interfor Corp (IFP.TO), and Iamgold (IMG.TO), saw increases ranging from 3% to 6%.

Consumer discretionary stocks also performed well, with Sleep Country Canada Holdings (ZZZ.TO), Restaurant Brands International (QSR.TO), Brp Inc. (DOO.TO), Magna International (MG.TO), Spin Master Corp (TOY.TO), Mty Food Group (MTY.TO), Canadian Tire Corporation (CTC.A.TO), Linamar Corp (LNR.TO), and Aritzia Inc (ATZ.TO) rising between 2% and 4.3%.

Statistics Canada reported that the annual inflation rate in Canada eased to 2.7% in June, down from 2.9% in the previous month, matching the three-year low observed in April. Monthly consumer prices dipped by 0.1% in June, contrary to expectations of a 0.1% increase, marking the first monthly decrease this year.

The core inflation rate fell by 0.1% month-over-month in June, following a 0.6% increase in May. Year-over-year, core consumer prices in Canada rose by 1.9% in June, up slightly from 1.8% in May.

In addition, data from Canada Mortgage and Housing Corporation indicated that housing starts declined by 9% from the previous month, totaling 241,672 units in June.