TSX off to strong start on energy boost

Gains in energy shares helped Canada’s main stock index kick off the final quarter of the year on a positive note as investors looked to overcome their anxiety about a global recession, triggered by aggressive central bank actions to curb inflation.

At mid-morning on Monday, the Toronto Stock Exchange’s S&P/ TSX composite index was up 249.71 points, or 1.35 per cent, at 18,693.93. The S&P/TSX composite index lost two per cent in the past quarter, and is down 11.8 per cent yearto-date.

“With sentiment remaining at bearish extremes, Q4 could bring in unexpected positive surprise for investors,” said Brandon Michael, senior analyst at ABC Funds in Toronto. “Seasonally, we are entering a very constructive period starting in October that goes into the spring. I believe the glass is half full.”

The TSX gained nearly five per cent in October last year and nearly six per cent in the final quarter a year earlier, as per Refinitiv data.

Boosting the main index, the energy sector climbed 4.8 per cent as crude prices jumped more than $4 a barrel on hopes of output cut by OPEC+. Oil is one of Canada’s major exports.

The materials sector, which includes precious and base metals miners and fertilizer companies, also added 1.7 per cent. Combined, the energy and materials groups account for 29 per cent of the TSX’S weighting.

Meanwhile, data showed Canadian manufacturing activity contracted for a second straight month in August as higher borrowing costs and an uncertain economic outlook weighed.