Financial numbers are shown on a television screen in Toronto as markets open for trading on Monday, March 16, 2020. THE CANADIAN PRESS/CP

TSX sets record despite crude prices dropping after hitting six-year high

TSX sets record despite crude prices dropping after hitting six-year high

TORONTO — After being underwater for most of the day, Canada’s main stock index recovered to set a new record close after crude oil prices briefly hit their highest levels in more than six years.

The S&P/TSX composite index closed up 18.57 points to 20,300.03 after losing as much as about 129 points.

In New York, the Dow Jones industrial average was down 208.98 points at 34,577.37. The S&P 500 index was down 8.80 points at 4,343.54, while the Nasdaq composite was up 24.31 points at 14,663.64.

Investors were a little rattled in early trading by weaker ISM services numbers for June that suggest the rapid growth from the pandemic lows is starting to peak, says Anish Chopra, managing director with Portfolio Management Corp.

That’s on top of U.S. unemployment numbers last Friday that showed the rate increased to 5.9 per cent even as 850,000 jobs were added in June.

“What I believe to be happening is investors are now looking at what’s happening as growth is going to slow,” he said in an interview.

Chopra said the playbook to follow is the one from 2010 to 2020 that saw economic growth of two to four per cent and low interest rates.

Under that scenario, the technology sector should thrive while cyclical sectors that have recently been strong ought to come under pressure.

On Tuesday, technology co-led the TSX along with real estate as Shopify Inc. was the strongest company on the Toronto composite index with its shares climbing 5.6 per cent.

Energy was the laggard among the seven losing sectors. It was down almost three per cent with shares of Crescent Point Energy Corp. and Cenovus Energy Inc. off 6.1 and 5.3 per cent, respectively.

The August crude contract was down US$1.79 at US$73.37 per barrel after climbing to US$76.98, the highest level since November 2014. The August natural gas contract was down 6.3 cents at nearly US$3.64 per mmBTU.

Slowing global growth tends to be negative for the price of oil, Chopra said. On top of that, an apparent fracturing of the OPEC alliance is tough on oil prices.

The Canadian dollar traded for 80.35 cents US compared with 81.02 cents US on Monday.

Consumer staples was lower as shares of Alimentation Couche-Tard Inc. dipped following recent gains.

Industrials also decreased as Air Canada shares lost some of its gains while materials was slightly lower despite higher gold prices as U.S. 10-year treasury yields fell to 1.35 per cent on growth concerns.

The August gold contract was up US$10.90 at US$1,794.20 an ounce and the September copper contract was down 2.5 cents at US$4.25 a pound.

Teck Resources Ltd. lost 5.2 per cent while Hudbay Minerals Inc. was off 4.7 per cent.

This report by The Canadian Press was first published July 6, 2021.

Companies in this story: (TSX:HBM, TSX:TECK.B, TSX:AC, TSX:ATD.B, TSX:CPG, TSX:CVE, TSX:SHOP, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press