The increase helps lift Toronto stock index while the Canadian dollar stays flat
TORONTO—Canada’s main stock index rose modestly January 23, helped in part by strength in the energy sector as the price of oil surged nearly US$1.
The S&P/TSX composite index was up 9.57 points to 16,357.55, as the March crude contract advanced 90 cents to US$64.47 per barrel.
Colum McKinley of CIBC Asset Management attributed the rally in oil prices to recent positive comments from the Organization of Petroleum Exporting Countries that its members and non-OPEC member Russia will continue to limit their production.
“Inventory data over the last number of weeks has shown significant draws … and that’s positive, giving the market a clear sense that the supply and demand imbalance is quickly correcting,” said McKinley, a vice-president and portfolio manager of Canadian equities at CIBC.
“If you look over the last numbers of months, you saw oil prices move higher. (Energy stocks) have moved higher but they have definitely lagged the commodity. We expect and we’re starting to see some catch up in that trade where the valuations on the energy stocks will start to expand to reflect a greater confidence in sustaining a larger oil price than originally anticipated by the market place.”
South of the border, US stocks were mixed as household goods makers including Johnson & Johnson and Procter & Gamble sunk following disappointing quarterly reports. Solar power companies, however, spiked in early trading after President Donald Trump approved tariffs on imported solar-energy components in a step intended to help US manufacturers.
In New York, the Dow Jones industrial average edged back 3.79 points to 26,210.81. The S&P 500 index added 6.16 points to 2,839.13 and the Nasdaq composite index was up 52.26 points to 7,460.29—both record highs for the third trading session in a row.
On the Canadian corporate front, shares of BCE Inc. were down 32 cents, or 0.55 per cent, to $57.72 after subsidiary Bell Canada alerted some customers on Tuesday—100,000 by media reports—that some of their personal information has been illegally accessed in a data breach.
Meanwhile, Cara Operations Ltd. Restaurants was up $2.45, or 9.83 percent, to $27.38 following news that the Vaughan, Ont.-based company is growing its restaurant empire yet again with a $200-million deal to buy Keg Restaurants Ltd.
In economic news, the International Monetary Fund estimated that the world economy expanded at a 3.7 percent annual pace last year, the fastest since 2011, and said it believes growth will accelerate to 3.9 percent in 2018-19. The IMF noted surprisingly strong growth in Europe and Asia and predicted that US tax cuts will give the American economy a short-term boost.
In currency markets, the Canadian dollar closed at an average trading value of 80.30 cents US, up 0.03 of a U.S. cent.
Elsewhere in commodities, the February natural gas contract climbed 22 cents to US$3.44 per mmBTU.
The February gold contract was up US$4.80 to US$1,336.70 an ounce and the March copper contract was down nine cents to US$3.11 a pound.
—With files from The Associated Press.