Short covering helps 'oversold' TSX snap losing streak - Reuters

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• Summary
• Companies

• TSX ends up 407.35 points, or 2.2%, at 18,613.63
• Energy rises 3.3%; oil settles 2.1% higher
• Financials advance 2.7%

TORONTO, Oct 13 (Reuters) - Canada's main stock index rose on Thursday, rebounding from its lowest intraday level in 20 months, as investors covered short positions that they had put in place in anticipation of hot U.S. inflation data.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended up 407.35 points, or 2.2%, at 18,613.63, ending a streak of five straight daily declines. Earlier in the day, the index touched its lowest since February 2021 at 17,873.18.

"We had discounted already a bad (inflation) number and a bad market and I am sure we were oversold aggressively," said Paul Gardner, a portfolio manager at Avenue Investment Management. "There was just too many shorts out there."

U.S. consumer prices increased more than expected in September as rents surged by the most since 1990 and the cost of food also rose, reinforcing expectations the Federal Reserve will deliver a fourth straight 75-basis-point interest rate hike next month.

Investors have worried that aggressive tightening by central banks could tip some major economies into recession.

U.S. stocks also rallied as investors covered short positions and technical support helped drive a rebound. read more

The Toronto market's energy sector rose 3.3% as U.S. crude oil futures settled 2.1% higher at $89.11 a barrel, supported by low levels of diesel inventory.

Heavily-weighted financials were up 2.7% even as data released by Refinitiv showed that the slump in Canada's mergers and acquisition activity extended into the third quarter. read more

Utilities rebounded 2.6% after falling sharply since August and industrials ended 1.8% higher.

Reporting by Fergal Smith; Additional reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; editing by Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

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Short covering helps 'oversold' TSX snap losing streak - Reuters
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