Canada’s main stock index edged higher on Wednesday, helped by gains for heavily-weighted financial shares and Enbridge Inc after the company said it would sell natural gas assets.
At 11:20 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index rose 40.41 points, or 0.25 per cent, to 16,302.69.
Nine of the index’s 10 main groups gained. Still, the index traded in a narrow range with U.S. markets closed for the Independence Day holiday.
Energy shares rose 0.1 per cent even as oil prices pared some recent gains.
Shares of Enbridge rose 1.8 per cent to $47.23. The company would sell its western Canadian natural gas gathering and processing business to Brookfield Infrastructure Partners LP and its institutional partners for an enterprise value of about $4.31-billion, the companies said.
Kinder Morgan Canada Ltd said in a filing on Tuesday it is restarting construction in August on the Trans Mountain pipeline’s expansion after halting work in the spring due to opposition from environmentalists and other groups as Canada prepares to buy the project in a bid to boost country’s oil exports.
The company’s shares dipped 0.1 per cent to $15.88.
Financials, which account for about one-third of the weight of the TSX, rose 0.1 per cent. The group was helped by a 0.6-per-cent gain for Brookfield Asset Management Inc.
World stocks were flat on Wednesday amid growing anxiety ahead of Washington’s end of week deadline to impose tariffs on Chinese imports, while the yuan steadied after China’s central bank acted to calm investors.
The MSCI All-Country World index, which tracks shares in 47 countries, was lower by less than 0.1 per cent on the day, recovering slightly from a 0.2-per-cent fall earlier.
Washington has said it would implement tariffs on $34-billion worth of Chinese imports on July 6, and Beijing has promised to retaliate in kind on the same day. However, China’s finance ministry said it will “absolutely not” fire the first shot in a trade war with the United States and will not be the first to levy tariffs.
Concerns about the outbreak of a global trade war have, among other factors, prevented a sustained recovery in global stock markets since a violent sell-off knocked them off records highs in February.
The United States has listed another 284 product lines valued at $16-billion that it will target with tariffs, including semiconductors and a broad range of electronics.
U.S. President Donald Trump also threatened tariffs on as much as $400-billion worth of Chinese goods if Beijing retaliates against the U.S. tariffs due to go into force on Friday.
Washington has launched a national security investigation into car and truck imports, with Trump threatening Europe with a 20-per-cent tariff on car imports while various countries have also already taken retaliatory steps against U.S. tariffs on steels and aluminium products.
Over 40 countries have voiced deep concern at the World Trade Organization (WTO) about possible U.S. measures.
“There is a lot of concern I think about the effect a long term trade war might have but actually if you look at the data we’re seeing, the economic data is not that bad,” said Michael Hewson, chief markets analyst at CMC Markets in London.
He noted that most equity markets were well above lows hit earlier this year.
“So it could have a drag, and it will have a drag. But will it push the global economy into recession? Not yet.”
The pan-European STOXX 600 index was last down 0.1 per cent, see-sawing from positive to negative territory during the day. Germany’s exporter-heavy DAX fell half a percent and Britain’s FTSE 100 fell 0.3 per cent.
A Chinese court temporarily banned Micron Technology from selling chips in China, the world’s biggest memory chip market, hitting shares in U.S. stock overnight and Asian semiconductor stocks on Wednesday.
Europe’s tech sector was fell 1-1/2 per cent led by falls in chipmakers STMicro and Infineon, which were down by nearly 8 per cent and 2.5 per cent respectively.
“The biggest risks to the technology sector are regulation and global semiconductor disruption from an escalating trade war,” Peter Garnry, head of equity strategy at Saxo Bank, said.
“At this point, the probabilities for both scenarios having major impacts on the technology sector in the short term are low,” Garnry said.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.25 per cent, a day after it hit a nine-month low. Japan’s Nikkei erased earlier losses to stand flat by late afternoon.
Mainland Chinese shares dropped, with CSI300 Index off 0.7 per cent.
U.S. markets were closed on account of the U.S. Independence Day holiday.
In the currency market, the yuan bounced back from an 11-month low following moves by China’s central bank on Tuesday to calm jittery financial markets.
The Chinese currency fetched 6.6444 per dollar in onshore trade, off Tuesday’s low of 6.7204.
Major currencies were treading water as traders fretted about the fallout of the intensifying trade frictions between Washington and the rest of the world.
The euro was off by 0.1 per cent at $1.16450 while the dollar was good for 110.52 yen, down 0.1 per cent.
Brent oil prices rose, driven higher by a threat from an Iranian commander and a drop in U.S. crude inventories for the second week in a row caused by an outage at a Canadian facility.
International benchmark Brent futures rose 0.1 per cent to $77.84 a barrel.
U.S. light crude futures traded down 0.3 per cent at $73.89 per barrel, after rising above $75 for the first time in more than three years on Tuesday.
Copper, sometimes seen as a barometer of global economic strength given its wide use in power and construction, hit a fresh nine-month low of $6,381.50 a ton on Wednesday.
Reuters