Canada’s main stock index opened slightly higher on Thursday, led by energy stocks riding on the back of rising oil prices.
The Toronto Stock Exchange’s S&P/TSX composite index was up 8.89 points, or 0.05 per cent, at 16,192.82.
The Canadian dollar was little changed against its U.S. counterpart on Thursday as voters in Ontario headed to the polls and ahead of an assessment by the Bank of Canada of risks to the stability of the financial system.
The central bank, which has worried about the country’s high household debt, will release at 10:30 a.m. ET its June issue of the Financial System Review. A press conference with Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins will follow at 11:15 a.m. ET.
Populist Doug Ford’s Progressive Conservative party is leading in opinion polls, in an election likely to end 15 years of Liberal rule in Ontario, Canada’s most populous province.
The Canadian dollar was nearly unchanged at $1.2949 to the greenback, or 77.23 U.S. cents. The currency traded in a narrow range of $1.2935 to $1.2968.
Canada’s dollar will strengthen over the coming year as economic growth prompts the Bank of Canada to raise interest rates again, a Reuters poll showed, but strategists see risk to their bullish forecasts from talks to revamp the North American Free Trade Agreement.
The S&P 500 opened little changed on Thursday after four days of gains, with a poor financial report from J.M. Smucker pulling down packaged food makers and countering a boost for technology firms from the lifting of a ban on China’s ZTE Corp.
The Dow Jones Industrial Average rose 45.75 points, or 0.18 per cent, at the open to 25,192.14. The S&P 500 opened higher by 2.49 points, or 0.09 per cent, at 2,774.84. The Nasdaq Composite gained 8.17 points, or 0.11 per cent, to 7,697.41 at the opening bell.
U.S. Commerce Secretary Wilbur Ross said on Thursday that Washington had reached a deal with China’s No. 2 telecommunications equipment maker that would allow it to do business again with U.S. suppliers.
Shares of optical component makers Acacia Communications , Oclaro Inc and Lumentum Holdings jumped on the news.
Qualcomm and NXP Semiconductors also rose 3.9 per cent and 5.4 per cent respectively. A $44-billion acquisition of NXP by Qualcomm is still under review by China’s market regulator, although there have been some signs of progress as China and Washington negotiated on trade in the past month.
“That will be bullish for any of the suppliers to ZTE, but more importantly bullish for any deal stocks waiting for regulatory approval,” said Art Hogan, chief market strategist, B. Riley FBR in New York.
“We had a significant run up of late and it takes pretty significant catalysts to move us higher,” said Hogan.
Shares in J.M. Smucker tumbled 7.6 per cent after the Folgers coffee maker reported quarterly results and full-year forecast that missed Wall Street estimates.
Shares of other food companies Kellogg dropped 2.3 per cent and General Mills fell 1.7 percent.
The technology-heavy Nasdaq closed at a record high for a third-straight day on Wednesday as investors focused on strength in the U.S. economy and solid earnings reports, putting aside trade concerns.
The CBOE Volatility index, a gauge of stock market volatility, eased to levels last seen before the early February sell-off, trading at 11.74 points.
Investors will look to a G7 summit starting in Canada on Friday for more signs on the trade tensions and tit-for-tat tariffs which weakened the stock market through February and March.
The two-day meeting will be the first chance for world leaders to confront Trump in person, since U.S. tariffs on steel and aluminum imports from Canada, Mexico and the European Union were imposed last week.
All six of the other G7 countries — Britain, Canada, France, Germany, Italy and Japan — are now paying the tariffs.
Canada and Mexico have retaliated against a range of U.S. exports and the EU has promised to do so as well.
Oil rose on Thursday on concerns about a plunge in exports from Venezuela, although surging U.S. production kept gains in check.
Brent crude futures were up 85 cents at $76.21 a barrel,, while U.S. West Texas Intermediate (WTI) crude rose 58 cents to $65.31 a barrel.
Venezuela, which faces the threat of U.S. sanctions and is in the midst of an economic crisis, is nearly a month behind delivering crude to customers from its main oil export terminals, according to shipping data, and chronic delays and production declines could breach state-run PDVSA’s supply contracts if backlogs are not cleared soon.
Tankers waiting to load more than 24 million barrels of crude, almost as much as state producer PDVSA shipped in April, are sitting off the OPEC member’s main oil port, according to shipping data.
“Troubles over supply from Venezuela come at a time when OPEC is considering easing supply cuts which have been in place since 2017 and were implemented to support the price,” London Capital Group head of research Jasper Lawler said.
“The big question for oil is whether or not OPEC decides to ease the production cuts, with the meeting still some two weeks away, oil traders could be in for an increased bout of volatility.”
Reuters