'Good news for the TSX': Commodity stocks oust financials as Canadian market heavyweights

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Energy and materials companies now constitute about 31.07 per cent of the S\u0026P/TSX Composite Index, surpassing Canada\u0027s banks, insurers and asset managers

The S&P/TSX Energy Sector Index has rallied 34 per cent this year and the S&P/TSX Materials Index climbed 26 per cent, while financials have dropped 1.4 per cent. Copper miner Turquoise Hill Resources Ltd. and oil and gas producer Vermilion Energy, Inc. are leading gains on the benchmark, soaring 79 per cent and 73 per cent respectively this year. Meanwhile, financials erased their strong start to the year, with four of the Big Six banks turning negative this month. CI Financial Corp.

The reversal in sector weightings could be a boon for the Canadian stock market this year as investors seek companies that stand to benefit from volatile global sentiment. At one point this month the Canadian benchmark had outperformed the S&P 500 by the widest gap in a quarter in 13 years. “The TSX is heavy on commodities and light on technology and health care versus the U.S. markets,” Taylor said. “With technology stocks under pressure with rising interest rates, this could be a great environment for the TSX to outperform.”

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