Canada’s main stock index fell slightly on Wednesday, as energy shares lost early gains despite a rise in oil prices as OPEC and its allied producers discuss cutting supply.
The energy sector climbed 0.1 per cent as oil rose about 2 per cent on Wednesday, recouping some of the previous session’s heavy selloff, on the growing prospect of OPEC and allied producers cutting output at a meeting next month to prop up the market.
Prices recovered, with Brent inching back above $67 after Reuters reported that OPEC and its partners are discussing a proposal to cut output by up to 1.4 million barrels per day (bpd), a larger figure than officials had mentioned previously.
Brent crude futures rose $1.36 to $66.83 a barrel, a 2.1-per-cent gain. WTI crude futures for December delivery rose $1.14 to $56.83 a barrel, a 2.1-per-cent gain.
The price of Brent has fallen by more than 20 per cent since early October on concern about excess supply and slowing demand, one of the biggest declines since a price collapse in 2014. U.S. crude had declined for a record 12 consecutive sessions to the lowest since November 2017.
“The market has cratered over the last few weeks and the pop today is related to the chatter that producers could cut up to 1.4 million bpd in 2019,” said Gene McGillian, vice president of market research for Tradition Energy in Stamford, Connecticut.
“Maybe some of the fears of extra supplies and reduced demand have finally been priced into the market, but I wouldn’t say that a bottom has set in yet.”
In Toronto, Vermilion Energy Inc. rose 2.7 per cent, while Suncor Energy Inc. was up 1.7 per cent.
Also helping the main index was Tahoe Resources Inc., which rallied 46.5 per cent, after Pan American Silver Corp. agreed to buy the miner for $1.07-billion in cash and stock deal.
Pan American Silver Corp., which fell 12 per cent, was the second biggest decliner on Canada’s main index.
At 11:45 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 31.39 points, or 0.21 per cent, at 15,099.44.
Canada Goose Holdings Inc. jumped 15.2 per cent, the second biggest gainer on the TSX, after the luxury apparel maker reported better-than-expected quarterly profit as revenue from its online and branded stores more than doubled, helping it raise its forecast for the full year.
The healthcare sector fell 4.3 per cent, the most among the three sectors that were trading lower, weighed by a drop in shares of cannabis producers.
Canopy Growth Corp. declined 10.1 per cent after posting a bigger-than-expected quarterly net loss. Aurora Cannabis Inc. was down 7.1 per cent, while Aphria Inc. sat 7 per cent lower.
U.S. stocks turned lower on Wednesday as Apple Inc led a decline in technology stocks, offsetting early support from tame U.S. consumer prices data and a rebound in oil prices.
The iPhone maker’s shares fell 2 per cent, extending its losses for the fifth straight day. A raft of profit warnings from Apple’s suppliers has fueled investor concerns that iPhone sales, in terms of volume, have hit a wall.
The S&P technology index was down 0.8 per cent, hurt by losses in Microsoft Corp and Adobe Inc .
Markets earlier got a boost from data that showed U.S. consumer prices increased 0.3 percent in October amid a rise in gasoline and rental costs, but were in line with expectations.
The S&P energy index which had risen in morning trade on a rebound in oil prices, following a 7-per-cent plunge on Tuesday, also gave up gains.
“The markets never really left correction mode and it will be with us for a while, at least till the selling into strengths keeps happening,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
An escalating trade war between the United States and China, worries about rising interest rates and slowing corporate profits have stalled gains for U.S. stocks, with the S&P 500 trading about 7 per cent below its record level.
The Dow Jones Industrial Average was down 159.75 points, or 0.63 per cent, at 25,126.74, the S&P 500 was down 16.07 points, or 0.59 pe rcent, at 2,706.11 and the Nasdaq Composite was down 48.96 points, or 0.68 per cent, at 7,151.91.
The S&P 500 gained 0.6 per cent at the open, reversing later in the day as all the 11 major S&P sectors moved into the red.
“We would think if it were a sustained move higher, volatility coming into the end of year would be lower than 19 or 20,” said Laurence Benedict, founder of Opportunistic Trader.
“People are forgetting that on Monday the market was down 600 points, basically we’re trying to stabilize at lower levels.”
The CBOE Volatility index, an indicator of short-term volatility in the stock market, touched more than 1-week high at 21.20 points.
The S&P utilities index fell 1.06 percent after PG&E Corp slumped 22.7 percent on warnings it could face “significant liability” in excess of its insurance coverage in the event that its equipment was found to have caused the blaze in California..
The pan-European STOXX 600 index lost 0.29 per cent.
European shares hit their lowest in two weeks as data showing the German and Japanese economies contracting in the third quarter fueled worries about global growth.
MSCI’s gauge of stocks across the globe gained 0.20 per cent.
The dollar index fell 0.29 per cent, with the euro up 0.24 per cent to $1.1316.
U.S. benchmark 10-year Treasury yields rallied from two-week lows on Wednesday, bolstered by continued optimism about Britain’s exit from the European Union.
Benchmark 10-year notes last fell 4/32 in price to yield 3.1599 per cent, from 3.145 per cent late on Tuesday.
Reuters