A sign board displays the TSX's close on Monday, Dec. 31, 2018. THE CANADIAN PRESS/Frank Gunn

S&P/TSX composite edges higher despite energy trending down on Keystone XL news

S&P/TSX composite edges higher despite energy trending down on Keystone XL news

TORONTO — Canada’s main stock index edged higher in a broad-based rally even as energy was pulled down by the prospect of a presidential permit being rescinded for the Keystone XL project.

The S&P/TSX composite index closed up 35.85 points to 17,944.88.

Nine of the 11 major sectors on the TSX were higher, led by technology and health care.

A 5.8 per cent increase in shares of BlackBerry Ltd. pushed technology up 1.4 per cent.

Health care gained 1.3 per cent with cannabis producer Aphria Inc. up 3.8 per cent.

The heavyweight financials sectors was higher while materials moved upwards on a rise in gold prices on some profit-taking after last week’s poor performance.

The February gold contract was up US$6.90 at US$1,836.80 an ounce and the March copper contract was up 1.15 cents at US$3.61 a pound.

Energy fell 1.6 per cent on lower crude oil prices and a 4.5 per cent pullback by TC Energy Corp. over uncertainty about the future of the western Canadian pipeline extension.

President-elect Joe Biden’s intention on Keystone XL, outlined in transition documents seen by The Canadian Press, suggests he plans to sign an executive order as early as inauguration day to rescind the permit issued in 2019 by predecessor Donald Trump.

“This really shouldn’t come as a huge surprise,” said Mike Archibald, vice-president and portfolio manager with AGF Investments Inc.

“There had been some talk that this would likely happen at some point of time in the first six months in his administration, although I will say I think it’s coming a little sooner than many had expected.”

The overhang pushed MEG Energy Corp. down five per cent, Seven Generations Energy Ltd. down 4.4 per cent and Vermilion Energy Inc. off 4.1 per cent.

“Clearly there’s going to continue to be an ongoing battle over whether or not this pipeline actually ever gets put into use,” Archibald said in an interview.

Crude oil prices also dipped with the March crude oil contract down 27 cents at US$52.15 per barrel and the February natural gas contract was down 11.8 cents at nearly US$2.62 per mmBTU.

TC Energy announced a plan Sunday for the Keystone XL project to achieve net zero emissions, even as its future appeared in doubt.

The Calgary-based company said it has a plan to eliminate the effect of greenhouse gas emissions from Keystone XL’s operations.

The company said net zero emissions will be achieved when the pipeline is placed into service in 2023 by buying renewable energy from electricity providers, and if it is not available it will purchase renewable energy credits or carbon offsets.

U.S. stock markets were closed for Martin Luther King Jr. Day.

The Canadian dollar traded for 78.36 cents US compared with 78.57 cents US on Friday.

The Canadian stock market tends to be very slow on days when its U.S. counterparts are closed.

Bank of America, Goldman Sachs and Netflix report earnings Tuesday.

Observers will see if these banks buck the trend of other large banks, whose shares were under pressure last week despite beating expectations.

And Netflix will give a sense if stay-at-home stocks that did well during the COVID-19 pandemic continue to attract money in the market, said Archibald.

This report by The Canadian Press was first published Jan. 18, 2021.


Ross Marowits, The Canadian Press

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