Canada’s main stock index was hovering near four-week high on Tuesday, boosted by gains in energy companies as price of brent crude rose to a level last seen in November 2014.
At 11:42 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 53.89 points, or 0.331 per cent, at 16,260.40.
Eight of the index’s 11 major sectors were higher, led by a 2.6-per-cent jump in health care stocks and 0.3-per-cent rise in the energy group.
Crude oil prices shot to a four-year high on Tuesday, catapulted by imminent U.S. sanctions on Iranian crude exports and the apparent reluctance of OPEC and Russia to raise output to offset the potential hit to global supply.
Brent crude futures were up 87 cents, or more than 1 per cent, at $82.07 a barrel having touched a session peak of $82.22, the highest price since November 2014.
The oil price is on course for its fifth consecutive quarterly increase, the longest stretch of gains since early 2007, when a six-quarter run led to a record high of $147.50 a barrel.
U.S. crude futures were up 37 cents at $72.45 a barrel, close to their highest since mid-July.
In Toronto, Encana Corp. rose 2.7 per cent to lead energy stocks. Imperial Oil Ltd. rose 0.5 per cent, while Canadian Natural Resources Ltd. increased 0.4 per cent.
Marijuana producers led health care stocks higher. Aurora Cannabis Inc. jumped 6.9 per cent after it issued its fourth-quarter report, while Canopy Growth Corp. was up 2.7 per cent.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 1.1 per cent.
Providing the biggest support to materials sector was a 2.9-per-cent gain in Barrick Gold, adding to Monday’s rally.
The three main U.S. stock indexes were little changed on Tuesday, as energy stocks gained with oil prices hitting a four-year high, offsetting losses in Facebook and chipmakers.
Facebook fell 0.9 per cent and was the biggest drag on the Nasdaq and the S&P 500, after co-founders of its photo-sharing app, Instagram, resigned with scant explanation.
The Philadelphia semiconductor index dropped 1.56 per cent, weighing on the technology sector, after brokerages Raymond James and KeyBanc cut their rating on a number of chipmakers.
“We’ve seen stocks in the technology sector showing strong performance this year. We are seeing profit taking in that sector and a rotation into some of the sectors that have not done as well,” said Jeff Zipper, managing director at U.S. Bank Private Wealth Management in Palm Beach, Florida.
Energy stocks jumped 0.77 per cent as Brent oil hit a four-year high, boosted by imminent U.S. sanctions on Iranian exports, and OPEC and Russia’s reluctance to raise output.
Energy stocks were off their session highs, leading to a slight dip in the market, after President Donald Trump again asked OPEC nations to stop raising prices in a speech at the United Nations General Assembly.
Financials, including bank stocks, gave up earlier gains to trade flat ahead of an expected interest rate hike by the Federal Reserve at the end of its two-day meeting later on Wednesday.
The Fed’s guidance on the path for future rate hikes and its comments on the impact of the escalating trade dispute between the United States and China will also help steer investments.
“Perhaps some of the rhetoric around the tariffs and the trade talk may have put some concern into the markets that the Fed might go slower and that might have kept financials back a little bit,” Zipper said.
The Dow Jones Industrial Average was up 20.46 points, or 0.08 per cent, at 26,582.51, the S&P 500 was up 0.95 points, or 0.03 per cent, at 2,920.32 and the Nasdaq Composite was up 6.89 points, or 0.09 pe rcent, at 8,000.14.
The Fed’s third hike this year would make cash the most attractive it has been in about a decade, lowering the appeal of stocks, especially those of dividend-paying companies such as utilities.
The utilities sector slid 1.06 per cent, the most among the 11 major S&P sectors. Five sectors were posting gains.
Reuters