Canada’s main stock index opened higher on Wednesday, led by shares of energy companies, as oil prices gained after U.S. President Donald Trump pulled the United States out of an international nuclear deal with Iran.
Th e Toronto Stock Exchange’s S&P/TSX Composite Index rose 44.23 points, or 0.28 per cent, to 15,886.94.
The Canadian dollar strengthened against its U.S. counterpart on Wednesday, rebounding from a nearly seven-week low the day before, as the price of oil surged after Mr. Trump abandoned the deal with Iran.
Mr. Trump announced on Tuesday the “highest level” of sanctions against the OPEC member, raising the risk of conflict in the Middle East and casting uncertainty over the supply of oil, one of Canada’s major exports.
U.S. crude prices were up 2.5 per cent at $70.75 a barrel.
The Canadian dollar was trading 0.5 per cent higher at $1.2886 to the greenback, or 77.60 U.S. cents.
The currency traded in a range of $1.2870 to $1.2975. On Tuesday, it hit its weakest since March 21 at $1.2998.
Wall Street opened higher on Wednesday, with shares of energy companies getting a boost from surging oil prices.
The Dow Jones Industrial Average rose 38.97 points, or 0.16 per cent, at the open to 24,399.18. The S&P 500 opened higher by 6.20 points, or 0.23 per cent, at 2,678.12. The Nasdaq Composite gained 14.63 points, or 0.20 per cent, to 7,281.53 at the opening bell.
Shares of oil majors Exxon and Chevron were up more than 1.5 per cent in early trading.
The S&P energy index closed up 0.78 per cent on Tuesday, as Wall Street was whipsawed by conflicting reports on Trump’s decision, ahead of the official announcement.
“While (energy sector) is providing near-term support for U.S. indexes, I wonder whether it will help in the longer-term, with the decision potentially increasing geopolitical risk,” Craig Erlam, senior market analyst at OANDA in London, wrote in a note.
The U.S. 10-year Treasury yield rose to a two-week high back above the key 3-per-cent level. Analysts said expectations for higher interest rates continued to drive bond yields higher, overshadowing any fallout from the U.S. exit from the Iran nuclear deal for now.
Investors are keeping a close watch on inflation, after the U.S. Federal Reserve’s favored gauge hit its 2-per-cent target.
The latest Labor Department report showed U.S. producer prices rose less-than-expected in April, held down by a moderation in the cost of both goods and services.
Walmart fell 3.4 per cent after it acquired a controlling stake in Indian homegrown e-commerce firm Flipkart for about $16-billion, the U.S. retailer’s biggest foreign investment.
Match Group rose 2 per cent after the Tinder-owner beat analysts’ estimates for quarterly revenue and profit as it attracted more subscribers to its dating apps and websites.
Walt Disney dipped 0.3 per cent. The media company, which is in the process of buying film and TV assets from Twenty-First Century Fox, reported quarterly profit that topped Wall Street forecasts.