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Market News At midday: TSX rises as financials gain from strong jobs data

Canada’s main stock index edged higher on Friday as financial stocks gained after a strong domestic jobs data cemented expectations of fourth interest rate hike of the year next week.

At midday, the Toronto Stock Exchange’s S&P/TSX composite index was up 45.14 points, or 0.28 per cent, at 16,311.75.

The latest data showed Canadian economy added 31,800 jobs in June, while a Reuters poll predicted an increase of 24,000 positions, cementing expectations the Bank of Canada will raise interest rates when it meets next week.

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The Canadian dollar traded higher following the jobs report and was up at 76.43 cents US.

Another report showed the country’s trade deficit grew on a sharp rise in imports of airlines and gasoline.

Ten of the index’s 11 major sectors were higher, led by 0.35-per-cent gain in the heavyweight financials sector.

Brookfield Asset Management’s 1-per-cent rise and nearly 0.4-per-cent increase in shares of Bank of Montreal and Royal Bank of Canada helped the financial index the most.

Also supporting the market was the telecoms sector , which gained 1.4 per cent. BCE Inc. and Rogers Communications were the biggest boost to the sector.

The energy sector climbed 0.5 per cent. U.S. crude prices were up 0.5 per cent a barrel, while Brent crude lost 0.6 per cent. Cenovus Energy rose 1.9 per cent and Husky Energy gained 1.65 per cent.

The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.2 per cent as gold futures fell 0.2 per cent to US$1,254.40 an ounce, while copper prices declined 1.1 per cent to US$6,275.50 a tonne.

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The largest percentage gainers on the TSX were Transcontinental Inc., which jumped 3.2 per cent and Cogeco Communications, which rose 3 per cent after National Bank of Canada upgraded the stock to “outperform.”

Centerra Gold fell 3.8 per cent, the most on the TSX, while the second biggest decliner was Enerflex, down 2.5 per cent.

The most heavily traded shares by volume were Aurora Cannabis, Bombardier, and Canopy Growth Co.

U.S. stocks rose on Friday as stronger-than-expected jobs growth in June and a surge in Biogen’s shares eased concerns about an escalating U.S.-China trade dispute after the two economies slapped tariffs on each other’s imports worth US$34-billion.

The Dow Jones Industrial Average was up 91.23 points, or 0.37 per cent, at 24,447.97, the S&P 500 was up 17.49 points, or 0.64 per cent, at 2,754.10 and the Nasdaq Composite was up 67.02 points, or 0.88 per cent, at 7,653.45.

Biogen jumped 15.6 per cent and was on track for its biggest percentage gain in over seven years after the company and Japanese drugmaker Eisai Co said their Alzheimer’s drug showed promise in a mid-stage trial.

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The S&P healthcare index rose 1.1 per cent, while the Nasdaq biotech index jumped 2.9 per cent.

The gains were broad-based, with all the 11 major S&P indexes and 27 of the 30 Dow components rising.

Nonfarm payrolls increased by 213,000 jobs last month, the Labor Department said, topping expectations of 195,000, while the unemployment rate rose from an 18-year low to 4.0 per cent and average hourly earnings rose 0.2 per cent.

The moderate wage growth allayed fears of a strong build-up in inflation pressures, keeping the Federal Reserve on a path of gradual interest rate increases.

“Today’s number really doesn’t indicate that wage pressures are getting out of hand, that’s a positive for the market,” said Anthony Saglimbene, global market strategist, Ameriprise Financial Services in Troy, Michigan.

Dispute between the United States and its partners over trade has rippled through financial markets since early March when President Donald Trump first threatened tariffs on metal imports.

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In his latest trade salvo, Trump warned the United States may ultimately target over US$500-billion worth of Chinese goods, an amount that roughly matches its total imports from China last year.

“You’re going to get some stalling of the market, should trade issues begin to accelerate,” said Gerry Sparrow, a portfolio manager for Interactive Brokers Asset Management, a Boston-based online investing company.

Besides Biogen, technology heavyweights Apple, Microsoft, Facebook and Amazon provided the biggest boost to the markets.

with files from Reuters

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