Friday, June 9

TSX opens week higher as banking crisis fears ebb

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Canada’s main stock index rose on Monday, led by the gains in banks and energy stocks, as investors turned hopeful that the turmoil in the global financial sector could be contained after a deal by US lender First Citizens BancShares.

Global markets got a lift after First Citizens BancShares Inc said it would purchase the loans and deposits of failed Silicon Valley Bank, calming investor angst about the global financial system.

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At 10:03 am ET (14:03 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 62.9 points, or 0.32%, at 19,564.39.

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The financials sector added 0.7% with heavy-weight banks rising 0.8%.

“Investors are breathing a sigh of relief as the banking sector remains free of any further negative developments over the weekend,” said Brandon Michael, senior analyst at ABC Funds.

“First Citizens’ announcement of the acquisition of Silicon Valley Bank instilled a broad sense of confidence and calm in the stability of the banking system.”

The energy sector added 0.3%, tracking strength in crude oil prices.

Bucking the trend, the materials sector fell 1.0% tracking weak bullion prices.

Following a strong start in January, Canadian equities fell in February and March on worries of further more demand-denting rate hikes by the US Federal Reserve, and on uncertainty surrounding the outlook and stability of the international financial system.

If gains hold, the TSX is on course to eke out a gain of 0.9% for the quarter ending in March.

A consortium led by Brookfield agreed to takeover Australia’s Origin Energy Ltd for A$15.35 billion ($10.21 billion) at an implied offer price of A$8.912 per share. Shares of the asset manager rose 0.1%

Brookfield Asset Management is in exclusive talks to acquire a majority stake in Data4, in a deal that could value the data center operator at close to 3.5 billion euros ($3.8 billion) including debt. (Reporting by Johann M Cherian in Bengaluru; Editing by Rashmi Aich)