CANADA STOCKS-Commodity-linked gains lift Toronto index

·2 min read

(Updates prices, adds analyst estimates)

By Amal S

Jan 19 (Reuters) - Canada's main stock index rebounded on Wednesday from a selloff in the previous session as an uptick in commodity prices lifted shares of mining and energy companies.

At 9:38 a.m. ET (14:38 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 65.33 points, or 0.31%, at 21,339.9. It fell 1.2% on Tuesday, the most in seven weeks.

"Markets are trying to bounce back a bit, the gains are pretty small relative to yesterday's selloff but it does look like they're trying to stabilize at this point," said Colin Cieszynski, chief market strategist at SIA Wealth Management.

The energy sector climbed 0.6%, tracking gains in oil prices after an outage on a pipeline from Iraq to Turkey increased concerns about an already tight supply outlook.

The materials sector, which includes precious and base metals miners and fertilizer companies, added 1.5% as gold futures rose 0.4% to $1,819.7 an ounce.

Toronto-listed technology stocks added 1%, rebounding after their worst session in two weeks.

Rising U.S. and European bond yields, however, weighed on sentiment, with investors awaiting next week's Federal Reserve policy meeting for more cues on the central bank's plan to tame inflation.

Signs that the Fed could aggressively raise interest rates have hit the benchmark Canadian index this year, pausing a rally that helped it notch a gain of 22% in 2021.

Pressure has also been mounting on the Bank of Canada to tighten monetary policy, with data earlier in the day showing annual inflation accelerated to an over two-decade high of 4.8% in December.

"The headline number were in-line, the core inflation was higher than expected, so it just generally keeps pressure on the Bank of Canada to start raising interest rates this year sometime probably still sooner rather than later," SIA Wealth Management's Cieszynski said.

Among individual stocks, Barrick Gold Corp gained 2.3% after reporting a 10% sequential rise in fourth-quarter output. (Reporting by Amal S in Bengaluru; Editing by Aditya Soni)