Canadian Shares Rebound After BoC

The S&P/TSX Composite index erased early losses and hovered slightly above the flatline at the 20,030 mark on Wednesday, halting three straight sessions of losses after the Bank of Canada raised its key interest rate by 50bps for the second straight decision.

The move surprised money markets that broadly expected a softer 25bps increase, taking borrowing costs to their highest level since 2008 as BoC policymakers extended their fight against soaring inflation.

Still, the decision supported Canadian equities as policymakers signaled that the bank's tightening cycle could have ended.

Toronto’s heavyweight banking sector pared losses and hovered 0.5% higher on average, while energy producers tracked the intra-day rebound for crude oil prices to trade firmly in the green.

In the meantime, policy-sensitive tech shares and Toronto’s large cannabis growing sector partially cut losses on hopes of no further rate hikes.