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TSX Fails To Hold Early Gains, Ends Just Marginally Up

After opening on a bright note, the Canadian stock market kept paring gains gradually on Wednesday, but eventually ended the session slightly higher thanks to strong gains in the energy space.

Higher crude oil prices and positive reaction to Federal Reserve Chairman Jerome Powell's remarks that hinted at a rate cut later this month contributed to market's gains.

However, stocks except those in the energy space, and a select few from mining and consumer staples sections, failed to find support.

The benchmark S&P/TSX Composite Index ended up 18.08 points, or 0.11%, at 16,563.29, after scaling a high of 16,641.79 and a low of 16,527.14 in the session.

The Capped Energy Index moved up more than 2%. Crescent Point Energy (CPG.TO) soared 9.25%. Whitecap Resources (WCP.TO) gained 7.3%, while Kelt Exploration (KEL.TO), Gran Tierra Energy (GTE.TO), Torc Oil and Gas (TOG.TO) and Precision Drilling (PD.TO) gained 6 to 6.25%.

MEG Energy Corp (MEG.TO), Enerplus Corp. (ERF.TO), Baytex Energy (BTE.TO), Encana Corp. (ECA.TO), Parex Resources (PXT.TO), Canadian Natural Resources (CNQ.TO), ARC Resources (ARX.TO) and Cenovus Energy (CVE.TO) moved up 2.5 to 5.5%. Tourmaline Oil Corp. (TOU.TO), PrairieSky Royalty (PSK.TO), Husky Energy (HSE.TO), Enerflex (EFX.TO) and Vermilion Energy (VET.TO) also rose sharply.

Mining stocks Torex Gold Resources (TXG.TO), Kinross Gold (K.TO), Hudbay Minerals (HBM.TO), Eldorado Gold (ELD.TO), Lundin Mining Corporation (LUN.TO), Yamana Gold (YRI.TO), First Quantum Minerals (FM.TO) and Barrick Gold Corp. (ABX.TO) gained 2.5 5o 7.5%.

The Bank of Canada today left its key interest rate unchanged at 1.75% for a sixth-straight meeting.

"Recent data show the Canadian economy is returning to potential growth," the central bank said in its accompanying statement.

"However, the outlook is clouded by persistent trade tensions. Taken together, the degree of accommodation being provided by the current policy interest rate remains appropriate," it added.

The bank said that it will continue to monitor data ahead of future decisions with a particular focus on developments in the energy sector and the effects of global trade tensions.

The bank downgraded its 2019 global growth forecast to 3% from 3.2% due to trade disputes. "Escalating trade conflicts, geopolitical tensions and related uncertainty are contributing to the broad-based slowdown of global economic activity," the bank said in its report.

Manulife Financial Corporation (MFC.TO) and BlackBerry (BB.TO) shed 2.2% and 3.1%, respectively.

U.S. stocks pared some gains after a fairly strong upmove, but still managed to end the session with solid gains.

The major averages all reached record intraday highs, although only the Nasdaq managed to end the session at a record closing high. The Dow rose 0.3%, the Nasdaq advanced 0.8% and the S&P 500 climbed 0.5%.

Early buying interest was generated in reaction to Federal Reserve Chairman Jerome Powell's prepared remarks before the House Financial Services Committee.

Powell told lawmakers that crosscurrents, such as trade tensions and concerns about global growth, have continued to weigh on the U.S. economic outlook since the central bank's June meeting.

The Fed chief pointed out that increased uncertainties about the economic outlook and muted inflation pressures led the central bank to pledge after the June meeting to "act as appropriate to sustain the expansion."

The comments from Powell led to renewed optimism about a potential rate cut by the Fed at its next meeting later this month.

Markets across the Asia-Pacific region turned in a mixed performance on Wednesday, while several markets in Europe closed weak.

In commodities, West Texas Intermediate Crude oil futures for August ended up $2.60, or about 4.5%, at $60.43 a barrel, a seven-week high, after data from U.S. Energy Information Administration showed crude stockpiles fell by 9.5 million barrels in the week ended July 5, nearly five times the expected drop.

Gold futures for August ended up $0.12, or about 0.9%, at $1,412.50 an ounce, the highest settlement in a week.

Silver futures for September ended up $0.079, at $15.226 an ounce, while Copper futures for September settled at $2.6950 per pound, gaining $0.0690 for the session.

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