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CANADA STOCKS-TSX hits record high as jobs data boosts hefty BoC rate cut bets
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CANADA STOCKS-TSX hits record high as jobs data boosts hefty BoC rate cut bets
Dec 6, 2024 8:10 AM

(Updated at 10:02 a.m. ET/ 15:02 GMT)

By Nikhil Sharma and Ragini Mathur

Dec 6 (Reuters) - Canada's main stock index hit a record

high on Friday, led by technology shares, as a

more-than-expected rise in the domestic unemployment rate

boosted bets for a hefty Bank of Canada interest rate cut next

week.

The Toronto Stock Exchange's S&P/TSX composite index

was up 96.48 points, or 0.38%, at 25,776.52, and was

on track to hit its fifth straight weekly gain.

Canada's unemployment rate rose to 6.8% in November,

exceeding expectations and reaching a near-eight-year high,

excluding the pandemic years, boosting the likelihood of a large

interest rate cut at the BoC's Dec. 11 policy meeting.

"The chances of another 50-basis-point rate cut are

definitely a lot stronger. I feel that's what the market is

responding to this morning," said Graham Priest, investment

advisor at BlueShore Financial.

Bets for a hefty half-point rate cut stand at 80%, up from

49% seen earlier in the day.

The BoC this year has already reduced its key policy rate by

a cumulative 125 basis points in a bid to boost economic growth.

"We've had a very strong performance this year and there

does seem to be the expectation that it will continue into

2025," Priest added. TSX is up 23% for the year.

Among sectors, information technology led the

gains, rising 2.1%, boosted by a 6.1% jump in e-commerce firm

Shopify ( SHOP ).

The heavyweight financials sector rose 0.4%,

buoyed by Laurentian Bank jumping 7.8% after exceeding

quarterly profit estimates, and Bank of Montreal ( BERZ )

gaining 4.2% following an upgrade by CIBC.

In contrast, the energy sector fell 2% after oil

prices slipped over 1%.

The market also took its cues from Wall Street where the

benchmark S&P 500 rose 0.3% after monthly payrolls data.

U.S. added 227,000 jobs in November, compared with estimates

of 200,000, supporting expectations of a Federal Reserve

interest rate cut this month.

Money markets put an 87% chance of a rate cut by the Fed on

Dec. 18.

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