TSX rises more than 1% after US-Iran truce calms down investors

Canada's main index of stocks soared on Wednesday as?mining shares led broad-based gains? after a U.S. - Iran ceasefire boosted investor sentiment.

By 10 a.m. The S&P/TSX composite index was up 1.57 % at 33,757.56 ET.

The U.S.-Iran ceasefire of two weeks has ended a six week conflict that had impacted energy supplies and raised inflation concerns.

According to a senior Iranian official who was involved in the talks, Tehran could open the Strait of Hormuz Thursday or Friday in advance of the planned peace talks in Pakistan if the framework for a ceasefire agreement is reached.

In a recent note, Robert Edwards, Chief Investment Officer at Edwards Asset Management, said that even though the durability of this ceasefire remains uncertain, stocks could still rise despite not having all the details sorted out.

The mere'scent of thawing tensions' is enough to cause forward-looking stocks climb the wall of concern.

The agreement is conditional, and its long-term impact has yet to be determined.

Jeffrey Roach is the chief economist at LPL Financial. He said in a note that investors must continue to monitor how geopolitical risk may affect wholesale pricing, growth, and financing conditions.

Gold subindex rose above 4%, and the materials sector, which includes metal miners, gained 3.8%, as precious metals prices hit a near three-week high.

Shares of e-commerce company Shopify gained 5.8%, while tech stocks rose 3.1%.

Blackline Safety's stock price soared by 25.5% following the agreement that U.S. private equity company Francisco Partners would take over the industrial safety technology provider.

Financials, the heaviest weighted index component, added 2.2%.

Brent crude futures, and U.S. West Texas Intermediate crude traded both slightly above $90 per barrel.

TSX’s energy subindex fell by more than 6%. Vermilion Energy, International Petroleum and other companies also dropped more than 10%.

(source: Reuters)