TORONTO — Canada’s main stock index edged lower Tuesday to end a volatile day of trading even as oil prices were helped by U.S. President Joe Biden announcing a ban on Russian oil imports and gold barely missing a record high.
“On a day-over-day basis it’s flat, but if you look intraday it’s been pretty interesting moves up and down,” said Philip Petursson, chief investment strategist at IG Wealth Management.
The S&P/TSX composite index closed down 72.37 points to 21,232.03 after gaining nearly 200 points midday.
U.S. markets were also relatively flat but moved lower following Monday’s steep losses amid ongoing uncertainty about how far the war between Russia and Ukraine will go and the broader economic impact.
In New York, the Dow Jones industrial average ended the day down 184.74 points at 32,632.64 after being up nearly 586 points. The S&P 500 index was down 30.39 points at 4,170.70, while the Nasdaq composite was down 35.41 points at 12,795.55 after being up more than 328 points.
The Dow and S&P 500 are both in correction territory while Nasdaq is now a bear market after being down 20 per cent from its recent high.
Petursson had expected a rebound for U.S. markets after Monday’s steep losses, but the day’s movement continued to reflect the uncertainty about the broader global economic impact higher oil prices.
Technology was the biggest laggard on the TSX, losing 1.8 per cent as shares of Shopify Inc. fell 7.6 per cent.
Industrials, telecommunications, financials and real estate were also lower. Industrials fell as Intertape Polymer Group shares surged 76 per cent after it announced a deal to sell to private equity firm Clearlake Capital Group LP for US$2.6 billion, including debt.
Energy was slightly higher as crude oil prices continued to climb as Vermilion Energy Inc. rose 7.3 per cent and Baytex Energy Corp. was 4.4 per cent higher.
The sector climbed to push up the TSX after Biden announced the ban on Russian oil with investors hoping it would increase pressure on Russia to come to “a conclusion on this crisis, sooner rather than later,” Petursson said in an interview.
The April crude oil contract settled up US$4.30 to US$123.70 per barrel after hitting an intraday high of US$129.44. The April natural gas contract was down 30.6 cents at US$4.53 per mmBTU.
While the price of crude is high on an absolute basis, he noted that it’s cheaper than where it settled in 2008 when adjusted for inflation.
The Canadian dollar traded for 77.72 cents US compared with 78.29 cents US on Monday.
Health care led the TSX, increasing 1.9 per cent as shares of Aurora Cannabis Inc. rose 4.7 per cent and Canopy Growth Corp. was 4.4 per cent higher.
Materials was pushed up by gold moving into record territory.
The April gold contract was up US$47.40 at US$2,043.30 an ounce after reaching an intraday high of US2,078.70 that’s just short of the US$2,089.20 intraday record from August 2020. The May copper contract was down 2.1 cents at US$4.71 a pound.
Petursson believes gold can continue to rally and is just days away from setting all-time highs.
“The rally in gold most recently has been an awakening due to the conflict in Ukraine. But with inflation going to stay at higher levels through 2022, I think gold is catching a bid on inflation as well as the risk-off trade.”
Petursson said investors lack confidence these days and are looking for direction about where markets are going and what the Russian invasion of Ukraine means to them.
“I think we’re more than halfway through the corrective action in the market and I think we’re close to forming a bottom here.”
This report by The Canadian Press was first published March 8, 2022.
Companies in this story: (TSX:VET, TSX:BTE, TSX:WEED, TSX:ACB, TSX:SHOP, TSX:ITP, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press