Canada’s main stock index opened at a near one-month high on Wednesday, helped by gains in energy companies on higher oil prices and a rise in financial stocks ahead of Bank of Canada’s interest rate decision.
The Toronto Stock Exchange’s S&P/TSX Composite Index was up 87.26 points, or 0.57 per cent, to 15,440.56, rising after four straight sessions of gains. Nine of the index’s 10 main sectors were in positive territory.
The Canadian dollar steadied against its U.S. counterpart on Wednesday after notching an eight-week high the day before, as investors turned their attention to the Bank of Canada’s interest rate announcement.
The central bank, which is expected to leave its benchmark interest rate on hold at 1.25 per cent on Wednesday, will also release its updated economic projections. The announcement is due at 10:00 a.m. ET.
An uncertain outlook for trade has been one of a number of issues that has worried the central bank since it last raised rates in January. But prospects of a deal to revamp the North American Free Trade Agreement have improved recently.
The top U.S., Canadian and Mexican officials driving NAFTA renegotiations will meet in Washington on Thursday, a Canadian government source said on Tuesday, as pressure for a quick deal mounted.
The Canadian dollar was trading 0.1 per cent lower at $1.2564 to the greenback, or 79.59 U.S. cents.
The currency traded in a range of $1.2548 to $1.2598. On Tuesday, it touched its strongest level in nearly two months at $1.2528.
U.S. stock indexes opened higher on Wednesday after the latest batch of earnings including Morgan Stanley added to optimism about the U.S. corporate reporting season, while a jump in oil prices lifted energy stocks.
The Dow Jones Industrial Average rose 34.22 points, or 0.14 per cent, at the open to 24,820.85. The S&P 500 opened higher by 3.72 points, or 0.14 per cent, at 2,710.11. The Nasdaq Composite gained 11.28 points, or 0.15 per cent, to 7,292.38 at the opening bell.
The Wall Street bank rose 1.6 per cent in early trading after it reported a 40-per-cent jump in quarterly profit, driven by its trading business.
Arch rival Goldman Sachs, which also reported a trading revenue surge on Tuesday, was up 0.4 per cent.
“Earnings continue to progress on the positive side and commodities are also on the rise, that should give the markets another boost,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Stocks have gained solidly in the past two days after strong results from industry bellwethers as well as positive economic data helped investors turn attention away from geopolitical and trade tensions.
U.S. President Donald Trump said on Wednesday that Mike Pompeo, the current CIA director and his nominee to be the top U.S. diplomat, met with North Korean leader Kim Jong Un last week.
“If they should be able to strike some sort of an agreement ... that would remove one of the many geopolitical fears,” said Cardillo.
Oil prices jumped more than 1.5 per cent, lifted by a reported decline in U.S. crude inventories and the risk of supply disruptions. Exxon and Chevron were up more than 1 per cent.
S&P 500 companies are expected to post an 18.6- per-cent rise in profits in the first quarter, the biggest increase in seven years, according to Thomson Reuters data.
United Airlines rose 2.8 per cent after the U.S. carrier reported a rise in profit, helped by higher fares.
CSX Corp was up 5.4 per cent after the railroad operator topped profit estimates, benefiting from a cost-cutting drive.
IBM, a Dow component, fell 5.9 per cent after the technology company reported profit margins that fell short of Wall Street expectations.
The Federal Reserve will issue its so-called Beige Book, a compendium of anecdotes on the health of the economy, at 2:00 pm ET.
Reuters