Canada’s main stock index rose on Thursday as energy shares were boosted by a rise in oil prices ahead of U.S. sanctions against major crude exporter Iran.
At 11:40 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 76.63 points, or 0.47 per cent, at 16,245.97.
Eight of the index’s 11 major sectors were higher, led by a 1.3-per-cent gain in the energy sector.
Cenovus Energy shares rose 7 per cent after the energy producer said it had signed three-year deals with Canadian National Railway and Canadian Pacific Railway to transport crude.
Canadian National Railway Co. rose 0.5 per cent while Canadian Pacific Railway Ltd. was up 0.6 per cent.
The energy group was also supported by higher oil prices which were driven by a prospect of shortfall in global supply ahead of imminent U.S. sanctions against Iran.
The most-active December Brent crude futures contract was up 26 cents at $81.05 a barrel, off the session high at $81.90 but still within sight of Tuesday’s four-year high of $82.55.
The front-month November contract expires on Friday.
U.S futures were up 31 cents at $71.88 a barrel.
In Toronto, Suncor Energy Inc. rose 1.4 per cent, while Husky Energy Inc. was up 1.6 per cent.
The largest percentage gainer on the TSX was Cameco Corp , which jumped 15 per cent after a favorable ruling from the Tax Court of Canada.
Marijuana producers fell after the Ontario government unveiled its framework for recreational cannabis retailing. Canopy Growth Corp. lost 4.7 per cent, while Aphria Inc. declined 2.4 per cent.
The Canadian dollar fell to a two-week low against an advancing greenback on Thursday, after criticism of Canada’s negotiating position on NAFTA by U.S. President Donald Trump lowered expectations for a trade deal by a Sunday deadline.
Trump on Wednesday blasted Canada over the slow pace of talks to revamp the North American Free Trade Agreement, known as NAFTA. But Canada’s Prime Minister Justin Trudeau dismissed the criticism, saying Canadians were tough negotiators.
“Markets have priced in a lower probability of a NAFTA deal this weekend,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. “That pushed us through $1.3050 and it snowballed from there.”
Canada sends about 75 per cent of its exports to the United States, so its economy could be hurt if a deal is not reached or if Trump follows through on a threat to impose tariffs on Canadian autos.
The Canadian dollar was trading 0.3 per cent lower at $1.3062 to the greenback, or 76.56 U.S. cents. It touched its weakest level since Sept. 11 at $1.3083.
“I still think there is a reasonable probability of a deal this weekend,” Anderson said. “It always gets the most intense right at the end on any type of negotiation because people actually have to move red lines.”
U.S. stocks rose on Thursday, helped by high-flying shares of Apple and Amazon, as well as the Federal Reserve’s confidence in the strength of the economy as it raised rates for the third time this year.
The Fed also left its monetary policy outlook for the coming years largely unchanged, but investors switched into sell-off mode shortly before the market close on Wednesday as they digested the implications of the end of an era of “accommodative” monetary policy.
Adding to the feel-good sentiment was data showing U.S. economic growth accelerated in the second quarter at its fastest pace in nearly four years as previously estimated.
“Fundamentally, earnings are rising, inflation appears non-problematic and interest rates are still relatively low and that presents a favorable backdrop for equities to trend higher,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota.
“FAANG’s are strong today in part because they have pulled back recently which is presenting an attractive entry point.”
Apple rose 2.2 per cent and was the biggest boost to the three main indexes after JPMorgan started coverage of the stock with an “overweight” rating, citing the iPhone maker’s quicker-than-expected move to a services business.
Amazon.com rose 1.6 per cent after brokerage Stifel talked up the company’s retail, cloud, and advertising businesses. The online retailer is set to open a brick-and-mortar store in New York City.
The recently revamped communications services sector gained 1.09 per cent, the most among the S&P sectors. It was lifted by gains in Netflix, Google-parent Alphabet and Facebook.
The Dow Jones Industrial Average was up 116.18 points, or 0.44 per cent, at 26,501.46, the S&P 500 was up 16.05 points, or 0.55 per cent, at 2,922.02 and the Nasdaq Composite was up 66.92 points, or 0.84 per cent, at 8,057.29.
The materials index, which fell 0.5 per cent, was the only one among the 11 major S&P sectors to drop. The technology sector was the biggest boost to the S&P, with a 0.73-per-cent gain.
While Apple boosted tech, one of the drags was Accenture , which fell 1.2 per cent as the consulting and outsourcing services company’s full-year profit fell short of analysts’ estimates.
Cruise operator Carnival Corp tumbled 5.5 per cent after its fourth-quarter forecast missed estimates. Norwegian Cruise Line and Royal Caribbean slid 1.5 per cent and 5.5 per cent, respectively.
Joining them was Conagra, which dropped 6.8 per cent after posting quarterly revenue that missed analysts’ estimates.
That weighed on other food companies, with Kellogg, JM Smucker and Campbell Soup shedding about 2 per cent.
Reuters