Canada’s main stock index opened at a three-week high on Tuesday in broad-based gains led by energy stocks, which rose in tandem with prices of oil, one of the country’s major exports.
The Toronto Stock Exchange’s S&P/TSX composite index was up 106.38 points, or 0.73 per cent, at 14,610.51.
The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Tuesday, pulling back from an earlier one-month high as domestic data showing a wider trade deficit offset further recovery in oil prices.
Canada’s trade deficit widened in November to $2.06-billion, pressured by a 2.9-per-cent drop in exports as crude oil exports declined, Statistics Canada said. Analysts had forecast a deficit of $1.95-billion.
The price of oil has rallied in recent days after falling sharply since October. U.S. crude oil futures were up 1.7 per cent at $49.33 a barrel on hopes that talks in Beijing between U.S. and Chinese officials might defuse a trade dispute between the world’s two biggest economies.
Stocks were also boosted by expectations of a trade deal, while the U.S. dollar climbed against a basket of major currencies as signs of slowing in the euro zone economy weighed on the euro.
The Canadian dollar was trading nearly unchanged at 1.3297 to the greenback, or 75.20 U.S. cents. The currency touched its strongest level since Dec. 7 at 1.3268.
U.S. stocks opened higher on Tuesday, lifted by hopes that the United States and China would strike a deal to end their months-long trade war that has battered financial markets.
The Dow Jones Industrial Average rose 148.97 points, or 0.63 per cent, at the open to 23,680.32. The S&P 500 opened higher by 18.42 points, or 0.72 per cent, at 2,568.11. The Nasdaq Composite gained 69.97 points, or 1.03 per cent, to 6,893.44 at the opening bell.
A second day of U.S.-China trade discussions in Beijing extended into Tuesday evening, a source told Reuters after officials from both sides expressed optimism. U.S. President Donald Trump said in a tweet that talks with China are going “very well.”
“With the U.S. and China in talks to de-escalate their trade conflict, the central bank showing a willingness to slow its tightening cycle and the economy still performing well, the markets may be looking a little more attractive,” Craig Erlam, senior market analyst at Oanda in London, wrote in a note.
The meetings are the first face-to-face talks since Trump and Chinese President Xi Jinping agreed in December to a 90-day truce in a trade war.
Trade-sensitive stocks such as Boeing Co, Caterpillar Inc and 3M Co rose between 1.3 per cent and 2.3 per cent in early trading.
Trade and concerns over slowing growth have been at the heart of a selloff at the end of 2018 that culminated in Wall Street posting its worst monthly performance in about a decade in December, driving down earnings estimate and stock valuations.
The S&P 500 hit a record high on Sept. 21 before tumbling about 20 per cent to a 20-month low on Christmas Eve.
The index has climbed about 8.5 per cent since then, with investors waiting for the fourth-quarter earnings season to kick off for a clear picture on how the trade war and a slowdown in global growth will affect profits.
Analysts estimate S&P 500 companies to increase their fourth-quarter earnings per share by 15 per cent. That compares with expectations of 20-per-cent growth three months ago, according to Refinitiv IBES data.