- Shares erased an earlier decline after falling 1.8% on Friday
- Open Text jumps 9 percent to record on Dell unit acquisition
Canadian stocks advanced, after dropping on Friday the most since February, as technology companies snapped a five-day losing streak and gold miners rebounded.
The S&P/TSX Composite Index rose 0.4 percent to 14,597.06 at 4 p.m. in Toronto. The benchmark gauge erased an earlier loss of as much as 0.6 percent, led by the biggest rally for tech stocks since July. Gold producers advanced, even as the metal slipped for a fourth day. Last week the benchmark turned in the worst weekly decline since May. It’s year-to-date gain now sits at 12 percent.
Stocks worldwide rebounded from a selloff on Friday across multiple asset classes as central bankers signaled reluctance to expand monetary stimulus. Following mixed signals from Federal Reserve officials on Friday, Governor Lael Brainard remained dovish in her approach to tighter monetary policy.
A report Monday showed the share of Canadians expecting real-estate prices to fall has reached the highest level in seven years, driving consumer confidence to its third-consecutive weekly decline. That followed data Friday showing Canadian employment rose faster than economists had forecast in August, doing little to bolster optimism in the nation’s economy. Last week the Bank of Canada maintained interest rates while also warning that risks of weak inflation and economic growth have increased.
Technology companies climbed 2.5 percent as Open Text Corp. rallied 9 percent to a record, the most since February. Canada’s second-largest software company said it will buy Dell’s enterprise content business for $1.6 billion, beefing up its flagship content management business.
Iamgold Corp. and Alamos Gold Inc. jumped more than 11 percent to help boost the materials group. Goldcorp Inc. added 3.3 percent. The S&P/TSX Global Gold Index rose 3.2 percent after dropping 4.5 percent on Friday.
Financial firms in the S&P/TSX slid 0.2 percent while consumer-staples stocks fell 0.5 percent. Agrium Inc. lost 2.5 percent and Potash Corp. of Saskatchewan Inc. slipped 1.4 percent after the two companies said they will merge to create the world’s largest crop-nutrient supplier with a market value of about $27 billion.
The S&P/TSX is also the second-best performing developed market in the world, just behind New Zealand. Canadian stocks are more expensive than their U.S. peers, with a price-earnings ratio of 23.2 for the S&P/TSX, a 14 percent premium over the S&P 500 Index.