TORONTO — Canada’s main stock index rose Tuesday as the energy sector got a boost after the country’s largest oil producers announced they’re talking with the Alberta government to increase their quotas if they ship the output by rail.
News that Suncor Energy Inc., Cenovus Energy, Canadian Natural Resources and others were in talks with the provincial government was the primary reason for the TSX gain, says Patrick Bernes, a portfolio manager for CIBC Asset Management.
“So I think that that’s just being taken well by the market because it means potentially increased sales,” he said in an interview.
The S&P/TSX composite index closed up 82.26 points at 16,545.21, up from an intraday low of 16,421.66.
In New York, the Dow Jones industrial average was down 22.65 points at 26,783.49. The S&P 500 index was up 3.68 points at 2,979.63, while the Nasdaq composite was up 43.35 points at 8,141,73.
U.S. markets were relatively flat as investors were in a holding pattern until they get more clarity about whether the Federal Reserve will cut interest rates.
“I just think the market’s kind of in wait-and-see mode because you get the testimony tomorrow by [Fed Chairman] Jerome Powell to the financial services committee and the markets are going to be parsing those words and the interview to get more clues about how Powell feels about the further rate cuts,” said Bernes.
Investors had anticipated rates would be cut later this month until a strong jobs report on Friday tempered those expectations.
Bernes said it will be difficult for the Fed to now meet those dovish expectations.
“If any of Powell’s comments tomorrow are taken on sort of the hawkish side that would probably be a bit of a headwind on equities.”
All 11 major sectors of the TSX were up on the day, led by a 1.5-per-cent gain for energy, followed by technology.
The August crude contract was up 17 cents at US$57.83 per barrel and the August natural gas contract was up 2.2 cents at US$2.42 per mmBTU.
The tech sector got a lift from Blackberry Ltd. shares rising 2.4 per cent and Open Text Corp. gained 1.8 per cent on the announcement of a strategic partnership with Google Cloud.
Health care was the weakest performer as shares of CannTrust Holdings Inc. lost 5.4 per cent, on top of the nearly 23-per-cent drop on Monday. Tuesday’s decrease came after its Danish partner quarantined a batch of products received from the licensed producer in connection with Health Canada’s recent discovery of illegal growing operations at its Ontario greenhouse.
Materials rose just 0.11 per cent as the August gold contract was up 50 cents at US$1,400.50 an ounce and the September copper contract was down 3.4 cents at US$2.62 a pound.
The Canadian dollar traded for an average of 76.18 cents US compared with an average of 76.45 cents US on Monday.