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Canada’s main stock index rose on Monday, aided by strong gains in telecom and energy shares, although trading volumes were low with U.S. markets closed for Juneteenth National Independence Day.

The S&P/TSX Composite Index gained 253.15 points, or 1.3 per cent, to 19,183.63. It was a modest yet broadly based recovery after a brutal selloff last week, where it posted its biggest weekly dip since March 2020 amid fears that aggressive interest rate hikes from major central banks could trigger a recession.

Utilities was the lone sector in the red on Monday. Ten sectors moved higher, including a 3.6 per cent gain for telecom and 2.4 per cent for energy.

Telecom rallied as investors applauded the announced $2.85 billion sale of Shaw Communications Inc.’s wireless carrier Freedom Mobile to Quebecor Inc.-owned Videotron Ltd. The transaction could pave the way for final approvals of Rogers Communications Inc.’s $26-billion takeover of Shaw.

Rogers shares increased 5.9 per cent, Shaw’s climbed 7.8 per cent and Quebecor’s were 5.8 per cent higher.

Energy rose as crude oil prices gained 78 cents a barrel to US$108.77, with Suncor Energy Inc. rallying 4.6 per cent following a ratings upgrade by an RBC analyst.

Elsewhere, Cargojet Inc. surged 11.1 per cent as a Scotia analyst upgraded his rating on the stock.

Heavily weighted financials advanced 1.4%, helped by a gain of 1.6% for Fairfax Financial Holdings. The company said it will sell its global pet insurance operations to JAB Holding, the private investment company of Germany’s Reimann family, in a $1.4 billion deal.

The TSX materials sector managed to eke out a gain, despite copper prices hitting nine-month lows amid continued concerns about higher interest rates spurring a recession. Three-month copper on the London Metals Exchange fell as low as US$8,830 per tonne before recovering modestly.

The Canadian dollar strengthened against its U.S. counterpart as the recent selloff in risk-sensitive assets paused and ahead of domestic data this week that could show inflation climbing to a new multi-decade high.

The Canadian dollar was trading 0.2 per cent higher at 1.30 to the greenback, or 76.92 U.S. cents. On Friday, it touched its weakest since November 2020 at 1.3078.

The risk of inflation becoming entrenched in Canada’s economy is growing, say analysts, as surging prices for gas and other highly visible consumer items undercut efforts by the Bank of Canada to keep expectations for price increases in check.

Canada’s consumer price index data for May, due on Wednesday, is expected to show inflation climbing to 7.4%.

Money markets see a 70% chance of a three-quarter-percentage-point rate increase.

Canadian government bond yields were higher across the curve, with the 10-year up 5.5 basis points at 3.463%.

Stocks globally also rallied on Monday.

The Canadian Press, Reuters, Globe staff

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