The Toronto Stock Exchange closed higher on Thursday, outpacing U.S. markets on a rally in oil that led to gains in Canada’s energy sector.
The Toronto floor’s S&P/TSX Composite Index rose 83.93 points to 20,265.37 points. The energy-heavy index benefited from a second day of rising oil prices, with the US benchmark West Texas Intermediate trading again above US$90 a barrel after falling earlier in the week.
Oil rose on the back of a favorable U.S. inventories report that is helping ease fears of a potential economic slowdown and its impact on energy demand, according to Fiera Capital portfolio manager Candice Bangsund.
The new Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), Haitham Al Gais, said on Thursday that spare production capacity was “becoming scarce” and that he expected demand to increase by nearly three million barrels. per day this year, which also boosted the markets.
On an individual stock basis, some of the biggest gainers were Athabasca Oil Corp., which rose more than 9% on the day, and Tamarack Valley Energy Ltd., up more than 6%.
“The energy sector was the best performing sector today and significantly outperformed [les attentes] “analyzes M.me Bangsund, noting that the capped S&P/TSX energy index was up 2.66% by the end of the day.
In New York, stock markets appeared to be “looking for direction” on Thursday as investors weighed mixed economic results and their implications for monetary policy, Ms.me Bangsund.
U.S. job insurance claims fell for the first time in three weeks on Thursday, as the Philadelphia Fed survey showed factory activity rose unexpectedly in August for the first time in three months.
U.S. home sales also fell for a sixth consecutive month in July, the latest sign that higher borrowing costs are weighing on the housing market.
“While stronger-than-expected economic data helped ease fears of a sharp economic slowdown, it also strengthened the case for further monetary policy tightening from the Federal Reserve,” adds Mme Bangsund.
Although the pace of inflation in Canada and the United States eased slightly in July, it remains much higher than central bankers in both countries would like. Despite a series of positive earnings reports from major retailers this week, investors remain concerned about the impact of inflation on businesses and consumers, as well as the risk that central banks will raise interest rates by too aggressively and push the economy into recession.
In New York, the Dow Jones Industrial Average gained 18.72 points to 33,999.04 points. The broader S&P 500 index rose 0.2% after hovering between small gains and losses for much of the day to close up 9.70 points at 4,283.74 points. The Nasdaq Composite Index gained 27.22 points to 12,965.34 as technology companies gained ground.
The U.S. dollar strengthened on Thursday and is trading near its highest level since late July, potentially leaving the door open for the Federal Reserve to continue its aggressive path of rate hikes, Ms.me Bangsund.
The Canadian dollar weakened despite higher crude prices on Thursday, with underlying strength in the US greenback pushing the loonie lower on the day. The Canadian dollar was trading at 77.35 cents US, down from its average price of 77.45 cents US the previous day.
On the New York Commodities Exchange, crude oil rose US$2.42 to US$90.05 a barrel, while natural gas fell 6 cents to US$9.19 a million. BTUs.
The price of gold fell US$5.50 to US$1771.20 an ounce and that of copper rose 5 cents US to US$3.63 a pound.
With the Associated Press