CANADA STOCKS-TSX ends higher as resource share gains counter stagflation worries
By Fergal Smith
March 24 (Reuters) - Canada's main stock index edged higher on Tuesday as gains for commodity-linked shares offset concerns that the Middle East war may have already put in place the conditions for slower economic growth and hotter inflation.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 57.78 points, or 0.2%, at 31,941.59.
On Monday, the index posted its biggest gain in five weeks. Still, it has pulled back 7.5% from a record closing high on March 2.
"We didn't get a big follow through from yesterday to today," said Michael Dehal, a senior portfolio manager at Dehal Investment Partners at Raymond James.
"Let's say the war ends tomorrow, we get a resolution - I think investors are worried that there are lingering effects."
The lasting effects could include stagflation, or a combination of slower economic growth and faster price increases, Dehal said.
The prospect of hotter inflation could lead to more hawkish monetary policy from central banks globally. Money markets have moved in recent weeks to price in three interest rate hikes this year from the Bank of Canada. CADIRPR
The energy sector .SPTTEN rose 1.7% as the price of oil CLc1 settled 4.8% higher at $92.35 a barrel.
Gold XAU= edged 0.1% lower. Still, the materials group .GSPTTMT, which includes metal mining shares, added 1.4%.
Goeasy Ltd GSY.TO said it had secured waivers from lenders linked to certain financial covenants for the fourth quarter, easing the pressure on the non-prime consumer lender after it disclosed a big charge-off and write-downs. Shares of goeasy were up 2.9%.
Six of the 10 major sectors ended lower, including technology .SPTTTK, which lost 1.3%.
Consumer discretionary .GSPTTCD fell 2.3%, with shares of Dollarama Inc DOL.TO down 9.6% after the discount retailer forecast 2027 sales largely below estimates.
