Canada’s main stock index edged higher on Tuesday, boosted by gains in energy companies as oil prices rose.
Oil futures jumped more than 1 per cent on Tuesday on signs that OPEC would not be prepared to raise output to address shrinking supplies from Iran, and as Saudi Arabia signaled an informal target near current levels.
Brent crude futures rose $1.08, or 1.4 per cent, to $79.13 a barrel.
U.S. West Texas Intermediate (WTI) crude futures gained $1.03 to $69.94 a barrel, a 1.5-per-cent gain.
At 11:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 59.62 points, or 0.37 per cent, at 16,141.93.
Energy stocks jumped 1.5 per cent, led by a 3.5-per-cent rise in Encana Corp. Vermilion Energy Inc. was up 2 per cent, while Canadian Natural Resources Ltd. increased 1.9 per cent.
Nine of the index’s 11 major sectors were higher, led by a 3.6-per-cent rise in the healthcare sector.
Aurora Cannabis Inc. rose 4.2 per cent after announcing on Tuesday it had not partnered with any beverage company, responding to a media report that Coca-Cola Co was in talks with the Canadian weed producer to make marijuana infused drinks.
Rivals Canopy Growth Corp. and Aphria Inc. jumped 3.5 per cent and 4.8 per cent, respectively.
On the macro front, data showed that factory sales grew by a greater than expected 0.9 percent in July, pushed higher by gains in the transportation equipment and chemicals industries.
Global equity markets gained on Tuesday as the latest tit-for-tat U.S.-Chinese trade dispute was seen as barely denting world growth, while U.S. Treasury yields rose in anticipation the Federal Reserve will hike interest rates this year and next.
China said it will levy tariffs on about $60 billion worth of U.S. goods, as previously planned, but cut the level of tariffs it will collect. On Monday, U.S. President Donald Trump said 10-per-cent tariffs on $200 billion of Chinese products will take effect on Sept. 24, reaching 25 per cent by year-end.
MSCI’s gauge of stocks across the globe gained 0.43 per cent and the pan-European FTSEurofirst 300 index rose 0.02 per cent. Wall Street was higher.
China has limited retaliatory levers it can pull on the tariff front, said Anthony Saglimbene, global market strategist at Ameriprise Financial Services in Troy, Michigan.
“The dent on the economic picture is likely to be small. We anticipate this last round of tariffs, the $200 billion, it’s only probably going to add 0.2 percentage points to consumer prices. That’s nothing,” he said.
The United States took 300 consumer products off its original list of products to receive tariff hikes, which will blunt the impact on the consumer, Saglimbene said.
Dutch bank ING estimated that 2.5 per cent of world trade was now affected by the tariffs and it will be 4 percent if Trump carries out threats to put levies on all Chinese imports.
The Dow Jones Industrial Average rose 80.49 points, or 0.31 per cent, to 26,142.61. The S&P 500 gained 13.49 points, or 0.47 per cent, to 2,902.29 and the Nasdaq Composite added 66.75 points, or 0.85 per cent, to 7,962.55.
Overnight in Japan, the Nikkei in Tokyo ended 1.4 per cent higher and MSCI’s 24-country emerging market index was up for the fourth day in the last five.
Despite all the noise, the widely-tracked dollar currency index rose 0.03 per cent, with the euro was up 0.06 per cent to $1.169.
The Japanese yen weakened 0.45 per cent versus the greenback at 112.37 per dollar.
U.S. benchmark 10-year and 30-year yields both climbed to fresh four-month peaks as investors continued to price in more interest rate increases by the Fed this year and next.
Benchmark 10-year notes fell 8/32 in price to lift its yield to 3.031 per cent.
In Europe, Italian government bond yields fell sharply on growing optimism that Italy’s new coalition budget will respect European Union rules on fiscal discipline.
Two- and five-year yields fell as much as 15 basis points to their lowest levels since July, while yields on short-dated top-rated German debt rose to four-month highs.
Reuters