A man works in the broadcast centre at the TMX Group Ltd. in Toronto, on May 9, 2014. THE CANADIAN PRESS/Darren Calabrese

Commodity prices rise to lift TSX and help loonie to hit near three-year high

Commodity prices rise to lift TSX and help loonie to hit near three-year high

TORONTO — Rising commodity prices lifted the loonie to reach a near three-year high and propelled Canada’s main stock index to a stronger start of the trading week.

Both crude oil and metals prices climbed as investors continued to rotate away from sectors that led during the COVID-19 pandemic and toward previous laggards.

“Clearly a cyclical tilt,” said Angelo Kourkafas, investment strategist at Edward Jones.

“It’s a positive tone for the market. A strong cyclical economic recovery appears to be around the corner and investors are trying to position for that.”

Energy, materials and financials led the TSX while technology and utilities were down.

Energy gained five per cent as crude oil surpassed the US$60 threshold. That prompted shares of MEG Energy Corp. and Vermilion Energy Inc. to surge 13.4 per cent, followed by Enerplus Corp. at 10.5 per cent, and Suncor Energy Inc. at 8.2 per cent.

The April crude contract was up US$2.44 at US$61.70 per barrel and the April natural gas contract was down 5.5 cents at nearly US$2.94 per mmBTU.

Crude prices rose on ongoing production uncertainties in Texas from the recent freezing conditions, questions about whether U.S. sanctions will be lifted against Iran, and next week’s OPEC plus Russian meetings, said Kourkafas.

“The economy’s gaining steam and that’s showing up not only in crude oil but commodity prices,” he said in an interview.

Materials was 3.3 per cent higher as gold and copper prices increased, with shares of New Gold Inc. increasing 13 per cent and First Majestic Silver Corp. up 12 per cent.

The April gold contract was up US$31 at US$1,808.40 an ounce and the March copper contract was up 6.7 cents at US$4.14 a pound.

“Rising inflationary expectations, rising yields and an outlook for a rapid recovery in the second half of the year, that’s boosting commodity prices.”

The Canadian dollar was unchanged at 79.28 cents US but hit a high of 79.50 cents US earlier in the day.

The heavyweight financials sector also got a lift a day before banks start to report quarterly results.

Investors appear hopeful that Canadian banks will report the same themes that drove stronger-than-expected results for U.S. banks — better credit quality and lower credit costs, said Kourkafas.

A steepening yield curve is also helping the profitability of the banking and insurance segments.

Health care, technology, utilities and consumer staples were among the losing sectors.

Industrials was also lower even though Air Canada shares climbed in lockstep with U.S. airlines, gaining 4.4 per cent on the day.

The airline sector got a lift following an upgrade by a Deutsche Bank analyst.

Kourkafas also said Israel’s encouraging early indications after its leading vaccine effort is positive for the reopening of global travel that has been hit hard by the pandemic.

The S&P/TSX composite index closed up 32.47 points to 18,416.74.

In New York, the Dow Jones industrial average was up 27.37 points at 31,521.69 after setting a record intraday high.

The S&P 500 index was down for a fifth day in a row, losing 30.21 points at 3,876.50, while the Nasdaq composite was down 341.41 points or 2.5 per cent at 13,533.05.

Kourkafas called Monday a good start to the week in Canada.

“If we look under the hood, what’s been leading has been these economically sensitive areas that project a faster return to normal as the year progresses.”

This report by The Canadian Press was first published Feb. 22, 2021.


Ross Marowits, The Canadian Press


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Central Alberta Freestyle Ski Club is hoping to win $50,000 through the Mackenzie Investments Top Peak contest. (Contributed photo)
Central Alberta ski club trying to win $50K in online contest

A central Alberta ski club has entered a contest where it can… Continue reading

Ben King scores for the Red Deer Rebels during the third period of a Western Hockey League game against the Calgary Hitmen at the Westerner Park Centrium Saturday. (Photo by Rob Wallator/Red Deer Rebels)
Rebels complete comeback to pick up first win of season

Rebels 3 Hitmen 2 (OT) The Red Deer Rebels were able to… Continue reading

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
Red Deer dips below 300 active COVID-19 cases

The number of active COVID-19 cases in Red Deer continued to drop… Continue reading

Lyn Radford, 2019 Canada Winter Games board chair, was named 2020 Sport Event Volunteer of the Year at the Prestige Awards. (File photo by Advocate staff)
WATCH: Lyn Radford wins award for volunteer efforts

The board chair of the 2019 Canada Winter Games in Red Deer… Continue reading

Mount Pearl Senior High in Mount Pearl, N.L., remains closed on Wednesday, March 3, 2021. The provincial health authority says there were 185 cases at 22 schools, including 145 infections among staff and students of one high school in Mount Pearl that was an early epicentre of the outbreak. THE CANADIAN PRESS/Paul Daly
In Newfoundland and Labrador, three ingredients made for explosive COVID-19 outbreak

ST. JOHN’S, N.L. — With her classes, three part-time jobs and a… Continue reading

A passenger places a tag on luggage at the departure terminal at Toronto Pearson Airport, in Mississauga, Ont., Friday, May 24, 2019. The economic and life disruption caused by the COVID-19 pandemic has prompted many recent immigrants to leave Canada and return to their countries of origin, where they have more social and familial connections. THE CANADIAN PRESS/Chris Young
COVID-19 pandemic prompts recent newcomers to leave Canada for their home countries

OTTAWA — The economic and life disruption caused by the COVID-19 pandemic… Continue reading

Rail cars wait for pickup in Winnipeg, Sunday, March 23, 2014. The fierce debate over cross-border pipelines is putting more Canadian oil and gas on trains destined for the United States — a country experts fear is ill-equipped for the potential consequences. THE CANADIAN PRESS/John Woods
As debate rages over cross-border pipelines, U.S. analysts brace for more oil by rail

WASHINGTON — The fierce debate over cross-border pipelines is putting more Canadian… Continue reading

Pictures and notes in from friends and classmates make up a memorial in support and memory of Aubrey Berry, 4, and her sister Chloe, 6, during a vigil held at Willows Beach in Oak Bay, B.C., on December 30, 2017. THE CANADIAN PRESS/Chad Hipolito
Mother of slain daughters supports recent changes to Canada’s Divorce Act

VICTORIA — Legal experts and a mother whose ex-partner was convicted of… Continue reading

Radio and television personality Dick Smyth is shown in an undated handout photo. THE CANADIAN PRESS/HO
Dick Smyth, Canadian maestro of news radio commentary, dies at 86

TORONTO — Radio and television personality Dick Smyth, whose booming commentary filled… Continue reading

Walter Gretzky father of hockey hall-of-famer Wayne Gretzky waves to fans as the Buffalo Sabres play against the Toronto Maple Leafs during third period NHL hockey action in Toronto on Tuesday, January 17, 2017. THE CANADIAN PRESS/Nathan Denette
Funeral for Walter Gretzky to be held Saturday in home town of Brantford, Ont.

The funeral for hockey legend Wayne Gretzky’s father Walter will take place… Continue reading

A sign for the Canadian Security Intelligence Service building is shown in Ottawa on May 14, 2013. A newly released audit report shows that difficulties with the judicial warrant process at Canada's spy agency — an issue that made headlines last summer — stretch back at least nine years. THE CANADIAN PRESS/Sean Kilpatrick
Spy warrant shortcomings stretch back almost a decade, newly released audit shows

OTTAWA — A newly released audit report shows that difficulties with the… Continue reading

In this file photo, a lotto Max ticket is shown in Toronto on Monday Feb. 26, 2018. (By THE CANADIAN PRESS)
No winning ticket for Friday night’s Lotto Max jackpot

TORONTO — No winning ticket was sold for the estimated $29 million… Continue reading

Most Read