TSX kicks off week higher on U.S. debt deal optimism

Canada’s main stock index edged higher on Monday, buoyed by gains in banks and industrial stocks as investors were relieved that Washington struck a tentative debt ceiling deal over the weekend.

Negotiators in the United States finalized a budget agreement to suspend the $31.4 trillion debt ceiling until Jan. 1, 2025, and the deal is now ready to move to Congress for a vote.

“The news on Saturday night, that the U.S. has agreed, at least in principle, to extend the debt ceiling and put that issue to rest, adds confidence to investors and markets who were worried (about a possible default),” said Barry Schwartz, portfolio manager at Baskin Financial Services.

At 11:22 a.m. AT, the Toronto Stock Exchange’s S&P/TSX composite index was up 29.52 points, or 0.15 per cent, at 19,949.83.

Trading volumes were subdued with markets in the United States and several European countries closed.

Banks added 0.4 per cent, while industrials climbed 0.3 per cent.

Bucking the trend, Fire & Flower Holdings Corp tumbled 40.0 per cent to its all-time low after brokerage ATB Capital Markets turned bearish on the drug retailer.

Canadian equities have thus far notched five straight weeks of losses, as a mixed bag of bank earnings, a rebound in inflation and a weakening outlook for commodities kept investors away from riskier assets.

Among other movers, Onex Corp was up 0.7 per cent after the group’s Westjet Airlines and a pilots’ union reached a tentative agreement where pilots of the airline will get a 24 per cent hourly raise over four years, plus other pay and benefits.

Mountain Valley natural gas pipeline, co-owned by Altagas Ltd and other U.S. firms, could win federal approval in the United States as part of the debt limit deal, sending shares of the utilities firm up 3.2 per cent.

Investors also await domestic first-quarter gross domestic product (GDP) figures due on Wednesday.