TSX starts the trading year higher as energy sector helped by increased oil price

TORONTO — Canada’s main stock index started the trading year higher in a volatile day Wednesday that saw the key energy sector get a boost from rising oil prices.

The S&P/TSX composite index sank to a intraday low of 14,112.84 soon after opening but rebounded to close up 24.30 points at 14,347.16.

North American investors were initially jittery after China released purchasing managers’ index (PMI) numbers that showed the first contraction of the country’s manufacturing sector in 18 months.

The number is viewed as a good leading economic indicator, adding to nervousness about economic growth in China and globally.

“So I think the market started worrying about the general backdrop,” said Giles Marshall, vice-president and portfolio manager at Fiduciary Trust Canada.

Canada’s PMI number released Wednesday showed that the country’s manufacturing growth slowed to a two-year low in December, while the U.S. index hit a 15-month low.

Markets turned around after oil prices got a boost from a preliminary report showing tanker volumes out of Saudi Arabia were cut by 500,000 barrels per day ahead of the January start of a deal by OPEC and non-OPEC countries to cut production by 1.2 million barrels a day.

“It lent support to that actually coming through,” Marshall said in an interview.

The February crude contract was up US$1.13 at US$46.54 per barrel and the February natural gas contract was up 1.8 cents at US$2.96 per mmBTU.

That sent the energy sector on the TSX up nearly two per cent as stocks like NuVista Energy Ltd. gained 6.1 per cent on the day.

The health-care sector rose 5.8 per cent, led by Bausch Health Companies Inc., which gained 8.8 per cent on an upgrade from a Piper Jaffray analyst who said that the worst earnings challenges are behind the Quebec-based drugmaker previously called Valeant, even though it remains highly leveraged.

Technology and materials lost the most ground, each falling by more than one per cent.

Materials fell even though the February gold contract was up US$2.80 at US$1,284.10 an ounce, while the March copper contract was down 0.8 of a cent at US$2.62 a pound.

Eldorado Gold Corp. gained eight per cent on the day, while New Gold Inc. was up 4.8 per cent. Barrick Gold Corp. lost 3.4 per cent on volume of 46.9 million shares on the first day that the world’s largest bullion miner began trading following its merger with Randgold Resources.

The Canadian dollar traded at an average of 73.50 cents US compared with an average of 73.30 cents US on Monday to close out 2018.

In New York, the Dow Jones industrial average ended the day up 18.78 points at 23,346.24. The S&P 500 index was up 3.18 points at 2,510.03, while the Nasdaq composite was up 30.66 points at 6,665.94.

Marshall said the first day of trading in 2019 was a “pretty decent start” to the year given the extremely weak December.

“Sentiment got incredibly negative and it’s not surprising to see a bit of a rebound,” he said. “I think the next few days are going to be pretty crucial.”

North American markets ended the year down, led by the TSX which lost 11.6 per cent, followed by the S&P 500 down six per cent, the Dow off 5.6 per cent and Nasdaq almost four per cent lower.

Although market analysts are predicting a stronger 2019, there’s no correlation between what happens on the first trading day in January and the rest of the year, noted Marshall.

“There is a loose correlation between January and the rest of the year, although that didn’t pan out last year.”

Just Posted

Smaller, more affordable, lots wanted in Red Deer’s Evergreen neighbourhood

Council approves first reading of requested lot-size changes

RDC’s new name to be unveiled in February

The next big milestone for Red Deer College is a new name,… Continue reading

Lacombe considering licensing cats

Council is expected to take a look at cat potential licensing regulations next month

Lacombe updating its nuisance bylaw

New bylaw expected to address everything from noisy snowblowers to driveway wrecks

RCMP seek suspect in Rimbey armed robbery

Rimbey Liquor Store was robbed at gunpoint about 8:30 p.m. on Saturday

2-for-1: Total lunar eclipse comes with supermoon bonus

On Sunday night, the moon, Earth and sun lined up to create the eclipse, which was visible throughout North and South America

Opinion: Faith in immigration must be preserved

Canada has a deserved reputation for extending its arms to newcomers, but… Continue reading

Olympian Adam van Koeverden wins federal Liberal nomination in Ontario riding

MILTON, Ont. — Former Olympic flag-bearer Adam van Koeverden will be carrying… Continue reading

World champion Osmond says it’s “really nice” not to know what future holds

SAINT JOHN, N.B. — Kaetlyn Osmond has a world title, Olympic medals… Continue reading

World economy forecast to slow in 2019 amid trade tensions

For Canada, the IMF’s estimate for growth in 2019 was 1.9 per cent, down from expected global growth of 3.5 per cent

Timberlake pops in on patients at Texas children’s hospital

DALLAS — Justin Timberlake has pulled some sunshine from his pocket for… Continue reading

UK police speak to Prince Philip about not wearing seatbelt

LONDON — British police have spoken with Prince Philip after the husband… Continue reading

‘Gotti’ leads Razzie nominations, Trump up for worst actor

The nominations were announced on Monday, Jan. 21 with some movies earning up to six nominations

Curtain rising Sunday night on total lunar eclipse

CAPE CANAVERAL, Fla. — The celestial curtain will be rising soon on… Continue reading

Most Read