World stock markets were little changed on Tuesday but still managed to touch a six-month high as investors took a breather following a three-day run of gains while the possibility of tightening supply kept oil prices on the rise .
MSCI’s key gauge of global equities had rallied 1.1 per cent on Monday, its best performance in three weeks, as manufacturing data in China and the United States put recession worries at bay. On Tuesday, the index held close to the unchanged mark for most of the session.
Major U.S. indexes were little changed, although the blue-chip Dow Jones Industrial Average was dragged down by a slump of 12.81 per cent in Walgreens Boots Alliance Inc after the drugstore chain cut its 2019 profit growth forecast. Economic data did little to stunt growth worries.
New orders for key U.S.-made capital goods slipped in February and shipments were unchanged, but data for January was revised slightly higher, which could support views that the manufacturing sector was stabilizing in the wake of the data on Monday.
“We’re still seeing mixed signals in terms of economic data,” said Emily Roland, head of capital markets research at John Hancock Investments in Boston.
The Dow Jones Industrial Average fell 79.29 points, or 0.3 per cent, to 26,179.13, the S&P 500 gained 0.05 points, or flat, to 2,867.24 and the Nasdaq Composite added 19.78 points, or 0.25 per cent, to 7,848.69.
Canada’s main stock index rose slightly on Tuesday, after marking its biggest daily surge in more than six weeks in the previous session.
The Toronto Stock Exchange’s S&P/TSX composite index was unofficially up 35.81 points, or 0.22 per cent, at 16,263.87.
Five of the index’s 11 major sectors were trading lower, led by a 0.4-per-cent decline in both the energy and health care sectors.
The heavyweight financials sector rose 0.3 per cent, while materials stocks rose 0.5 per cent.
Leading the index were Kirkland Lake Gold Ltd., up 5.0 per cent, Uni-Select Inc., up 4.5 per cent, and Torex Gold Resources Inc., higher by 4.3 per cent.
Lagging shares were BRP Inc., down 3.9 per cent, Brookfield Business Partners LP, down 3.7 per cent, and CannTrust Holdings Inc., lower by 3.6 per cent
The Canadian dollar weakened against its U.S. counterpart on Tuesday, pulling back from an 11-day high the previous day as weak housing data from one of Canada’s major cities pointed to the economy’s susceptibility to higher interest rates.
Vancouver home sales slumped 31.4 per cent in March on an annual basis to hit the lowest for the month in more than three decades, the Real Estate Board of Greater Vancouver said.
“Today’s movement (in the Canadian dollar) is really just a reaction to the really soft residential real estate numbers from Vancouver,” said Scott Lampard, head of global markets at HSBC Bank Canada.
“The interest rate sensitivity of the Canadian economy because of the debt load that has been layered on ... is probably higher than people had thought it was before, at which case at one-and-three-quarters percent, monetary policy is already in a restrictive position.”
The Bank of Canada has tightened its benchmark interest rate 125 basis points since July 2017, to a level of 1.75 per cent.
On Monday, Bank of Canada Governor Stephen Poloz expressed guarded optimism that the country would emerge from a soft patch, but maintained a cautious tone overall, saying the economic outlook still warrants an interest rate below the neutral range.
The central bank’s estimate of neutral, the level at which it is neither stimulating nor restraining the economy, is between 2.5 per cent and 3.5 per cent.
The Canadian dollar was trading 0.3 per cent lower at 1.3345 to the greenback, or 74.93 U.S. cents. The currency, which touched on Monday its strongest level in nearly two weeks at 1.3297, traded in a range of 1.3303 to 1.3375.
After a sluggish start, European shares built some late momentum to close at their highest level in six months, helped by gains in insurers and automakers.
Europe was led by a jump of 1 per cent in London’s FTSE 100 index as sterling weakened. That came as the European Union said Britain could be heading for a potentially disorderly exit in 10 days as Prime Minister Theresa May met with ministers to work out ways to break the Brexit deadlock.
But sterling reversed course following the close of European indexes as Prime Minister Theresa May looked to ask for another Brexit delay to sit down with the opposition Labour leader, a last-ditch gambit to break the deadlock over Britain’s exit that enraged many in her party.
The pan-European STOXX 600 index rose 0.35 per cent.
The dollar index rose 0.1 per cent, with the euro down 0.12 per cent to $1.1199. Sterling was last trading at $1.3127, up 0.21 per cent on the day.
The Brexit concerns also pushed yields on U.S. Treasuries lower from one-week highs as investors looking for bargains and a safe-haven bid stepped in.
Benchmark 10-year notes last rose 7/32 in price to yield 2.4724 per cent, from 2.497 per cent late on Monday.
Oil prices on Tuesday hit their highest level so far in 2019, with Brent crude approaching $70 a barrel, on the prospect that more sanctions against Iran and further Venezuelan disruptions could deepen an OPEC-led supply cut.
Brent futures reached a session peak at $69.51 a barrel, the highest since Nov. 13. The global benchmark rose 36 cents, or 0.52 per cent, to settle at $69.37 a barrel.
U.S. West Texas Intermediate (WTI) crude rose 99 cents, or 1.61 per cent, to settle at $62.58 a barrel, after touching $62.72, its highest level since Nov. 7.
The United States is considering more sanctions against Iran, the fourth-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), an official said.
Reuters