TORONTO — Canada’s main stock index rose for a second-straight week as commodity prices continued to march higher with oil surpassing US$115 per barrel Friday over worries about the war in Ukraine.
“All the commodities are running,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
Crude oil, gold, copper, nickel, steel, aluminum and agriculture prices have all surged on worries that sanctions will hurt supplies from Russia, while exports from Ukraine will also be constrained.
“We’ve seen a lot of different commodities starting to run, because between Russia and Ukraine, they’re both huge commodity producers and not just oil, but also metals and agricultural commodities,” he said in an interview.
Energy led the TSX, climbing 3.5 per cent as crude oil prices surged 7.4 per cent Friday to end the week up 25 per cent and 52 per cent higher year-to-date.
The April crude oil contract was up US$8.01 at US$115.68 per barrel and the April natural gas contract was up 29.4 cents at US$5.02 per mmBTU.
Baytex Energy Corp. increased 9.8 per cent.
Cieszynski isn’t sure if an eventual ceasefire in Ukraine would prompt commodities, especially oil, to suddenly plummet, because rumours of a nuclear deal with Iran would bring some oil supply back to the world market.
“So we’ve got these two opposing forces … and either one could just pop out of nowhere all of a sudden, so it’s hard to predict which one might dominate on any given day.”
The Canadian dollar lost some ground despite higher crude prices as the U.S. dollar strengthened, trading for 78.43 cents US compared with 78.96 cents US on Thursday. However, it has outperformed the euro, which has lost about one per cent of its value over the past week.
Materials increased 3.2 per cent as metals prices climbed with the April gold contract increasing US$30.70 at US$1,966.60 an ounce and the May copper contract was up 15.6 cents at US$4.94 a pound.
Agnico Eagle Mines Ltd. shares were up 7.4 per cent, while Nutrien Ltd. and Capstone Mining Corp. rose 6.3 and 5.0 per cent, respectively.
Commodities propelled the S&P/TSX composite index into positive territory, closing up 152.02 points to 21,402.43.
In New York, a strong jobs report in February wasn’t enough to prevent U.S. markets from losing ground for another week.
The Dow Jones industrial average was down 179.86 points at 33,614.80. The S&P 500 index was down 34.62 points at 4,328.87, while the Nasdaq composite was down 224.50 points at 13,313.44.
“The headline number for non-farm payrolls was great and the inflation number was not as bad as people had thought, which means it’s the geopolitical situation that’s weighing on markets more right now,” said Cieszynski.
The U.S. economy added 678,000 jobs last month, beating expectations and helping to move the unemployment rate down to 3.8 per cent.
Six the 11 sectors on the TSX were higher, with increases ranging between 1.5 and 3.5 per cent.
Share price increases by Canadian Pacific Railway Ltd. and Canadian National Railway Co. helped to push industrials higher, even though Air Canada followed the path of U.S. travel stocks by falling 5.0 per cent.
Technology was the biggest laggard, losing 3.6 per cent as capital is flowing out of growth sectors into resources and defensive havens.
Lightspeed Commerce Inc. fell 8.3 per cent and Shopify Inc. was down 5.9 per cent.
“Certainly we’re seeing that sectors that had benefited from the stay-at-home economy have been weakening,” Cieszynski said.
Consumer discretionary was down 1.8 per cent as Martinrea International Inc. lost 7.3 per cent after reporting disappointing results and Magna International Inc. fell 5.8 per cent after announcing it was idling its Russian factories because of the war with Ukraine.
This report by The Canadian Press was first published March 4, 2022.
Companies in this story: (TSX:MRE: TSX:MG, TSX:BTE, TSX:CP, TSX:CNR, TSX:AC, TSX:LSPD, TSX:HOP, TSX:AEM, TSX:NTR, TSX:CS, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press