TSX hits record high, Aritzia top performer after strong results

By Nikhil Sharma and Nivedita Balu

(Reuters) -Canada's main stock index hit a record high on Friday and recorded its best weekly performance since October, as investor bets on U.S. rate cuts remained firm despite slightly hotter-than-expected producer price numbers.

At 10:31 a.m. ET (1431 GMT), the S&P/TSX composite index was up 129.39 points, or 0.57%, at 22,673.52.

Canadian markets tracked Wall Street south of the border where the indexes closed higher, while the big banks fell after reporting mixed results. [.N]

The U.S. producer price index (PPI) showed a rise of 0.2% in June, a day after softer consumer prices reading supported a downward trend of inflation in the world's largest economy.

Despite a moderate rise in the PPI dataset, markets still maintained a 96.2% chance of a rate cut by the U.S. central bank in September. [0#FEDWATCH]

"Although today's data may go against those hoping for a September cut, when you look back from the trees, what we're finding is the US economy is slowing," said Macan Nia, co-chief investment strategist at Manulife Investment Management.

"We believe that will provide the Fed ammunition to begin cutting rates in September."

On the Toronto Stock Exchange, consumer discretionary was among top gainers with a 1.2% rise boosted with Aritzia's 14.8% rise to hit its highest price since January 2023, after its first-quarter earnings beat analysts' estimates.

Shares of Filo Corp surged 6.7% and those of Lundin Mining Corp rose 2% after Reuters reported mining giant BHP and Lundin were set to make a joint bid for Filo.

Cogeco Communications gained 4% after its third-quarter revenue beat analysts' estimates, boosting the capped communication services index up 0.83%.

Canadian inflation data due next week will have investors adjust their rate-cut bets ahead of the Bank of Canada's next monetary policy meeting on July 24.

(Reporting by Nikhil Sharma in Bengaluru and Niveidta Balu in Toronto; Editing by Shreya Biswas and Alistair Bell)