TSX starts 2023 with a gain as gold prices climb
By Fergal Smith
TORONTO (Reuters) - Canada's benchmark stock index rose on Tuesday, the first trading day of the new year, helped by an uptick in gold prices and as investors eyed a seasonal tailwind for the market.
The Toronto Stock Exchange's S&P/TSX composite index ended up 58.85 points, or 0.3%, at 19,443.77.
"Seasonality is in play with the January effect, in which prices trade meaningfully higher to start the year as investors bolster their stock holdings and tax loss selling ends," said Brandon Michael, senior analyst at ABC Funds in Toronto.
The materials group, which includes precious and base metals miners and fertilizer companies, added 2.2% as gold touched its highest level since June at nearly $1,850 per ounce.
Technology also gained ground, rising 1.7%, and industrials ended 1.1% higher.
The TSX fell 8.7% in 2022 along with declines for many major global benchmarks as central banks, including the Bank of Canada, raised interest rates aggressively to tackle soaring inflation.
"It is increasingly likely that the global economy is entering a meaningful slowdown, considering the lagged and variable effects of rising interest rates," Michael said.
Data on Tuesday showed that Canadian factory activity contracted for a fifth straight month owing to weakening demand and an uncertain economic outlook.
Capping gains for the index was a sharp decline in energy shares, falling 5.8%, as oil prices settled 4.1% lower at $76.93 a barrel. Oil was pressured by weak demand data from China, a gloomy economic outlook and a stronger U.S. dollar.
Shaw Communications Inc was also a drag, ending nearly 1% lower after a Federal Court put a stay on the telecom company's C$20 billion ($14.6 billion) merger with Rogers Communications Inc.
The shares posted sharp gains on Friday.
($1 = 1.3671 Canadian dollars)
(Reporting by Fergal Smith; Additional reporting by Johann M Cherian in Bengaluru; Editing by Stephen Coates)