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At the open: TSX rises on possible Canada exemption from U.S. tariff

The TSX logo is seen in Toronto in this file photo.

© Mark Blinch / Reuters

Canada's main stock index edged up on Thursday after U.S. President Donald Trump promised to be flexible over import tariffs when dealing with his country's "real friends."

The Toronto Stock Exchange's S&P/TSX composite index opened up 43.56 points, or 0.28 per cent, at 15,516.17.

A White House official said on Wednesday night that Mr. Trump planned to offer Canada and Mexico -- fellow signatories of the North American Free Trade Agreement (NAFTA) -- the possibility of a 30-day exemption from the tariffs.

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In a tweet on Thursday, Mr. Trump said he would show "great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military."

Shares of trade-sensitive auto parts and railroad companies recovered. Magna International Inc. advanced 0.5 per cent to $67.96 and Canadian National Railway Co. was up 0.3 per cent at $94.35.

Machine manufacturer Linamar Corp. and Packing tape-maker Intertape Polymar Group were the biggest gainers on the index, rising 7.6 and 7.2 respectively, after reporting fourth-quarter profits that beat expectations.

The healthcare group was the sector with the most gains, rising 1.4 per cent.

Cominar REIT was the biggest decliner on the index, falling 5.5 per cent after reporting a drop in its quarterly operating revenue.

Mining companies Ivanhoe Mines, Franco-Nevada Corp. and Paramount Resources were also among the biggest decliners, hit by a retreat in metal prices.

Copper futures pulled back 1.6 per cent to $6,836.50 a tonne, while gold futures slipped 0.2 per cent to $1,324.2 an ounce.

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The TSX materials group, which includes precious and base metals miners and fertilizer companies, lost 0.5 per cent.

U.S. crude oil futures fell 0.75 per cent to $60.69 a barrel.

Cominar was the most actively traded stock on the index, followed by marijuana producers Canopy Growth and Aphria Inc.

Wall Street opened higher on Thursday as fears of a global trade war ebbed following signs that Mr. Trump's proposed hefty import tariffs on steel and aluminum could exclude key trading partners.

The Dow Jones Industrial Average rose 96.74 points, or 0.39 per cent, to 24,898.10. The S&P 500 gained 6.87 points, or 0.25 per cent, to 2,733.67 The Nasdaq Composite added 28.88 points, or 0.39 per cent, to 7,425.53.

Markets fell sharply on Wednesday following the resignation of chief economic adviser Gary Cohn, a strong advocate of free trade, on concerns the move would make it more easier for Trump to push ahead with his plans.

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But Wall Street's main indexes recovered after a White House spokeswoman said Trump's tariffs plan may include "potential carve-outs for Mexico and Canada based on national security, and possibly other countries as well."

"Anything that would suggest a little bit of a roll back from the tariffs is viewed as positive," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

Trump said in a tweet on Thursday he would hold a meeting at 3:30 p.m. ET over his planned tariffs and that the United States must show flexibility toward its allies.

The plan has faced strong opposition from most of key partners, with Europe and China warning they would respond in the event of a trade war with the United States.

Among stocks, Express Scripts soared 17 percent after health insurer Cigna agreed to buy the pharmacy benefits manager for $54-billion deal. Cigna shares slipped 5.6 per cent.

Kroger fell 5 per cent after the supermarket chain issued a disappointing full-year profit forecast.

American Eagle Outfitters rose 3.3 per cent as sales at established stores topped analysts' estimates for the holiday shopping quarter.

A Labor Department report showed initial jobless claims rebounded from a more than 48-year low last week, but the trend continued to point to robust labor market conditions.

A comprehensive reading on jobs and wage is expected on Friday. The average hourly earnings is expected to slow to 2.8 per cent in February on an annualized basis, from 2.9 per cent in January.

Investors are worried that higher wages could lead to faster interest rate increases by the Federal Reserve and make borrowing expensive for companies.


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