Canada’s main stock index opened higher on Wednesday, boosted by a rise in energy stocks as oil prices gained after an industry report showed a drop in U.S. crude inventories and a cut in Libyan supplies.
The Toronto Stock Exchange’s S&P/TSX composite index was up 150.96 points, or 1.03 per cent, at 14,818.79.
The Canadian dollar strengthened against its U.S. counterpart on Wednesday, boosted by higher oil prices and investor optimism over trade negotiations between the United States and China.
U.S. President Donald Trump, in an interview with Reuters, said that trade talks with Beijing were underway by telephone, with more meetings likely between U.S. and Chinese officials.
He also said he would intervene in the Justice Department’s case against a top executive at China’s Huawei Technologies
if it would serve national security interests or help close a trade deal with China.
The executive was granted bail by a Canadian court on Tuesday, 10 days after her arrest in Vancouver at the request of U.S. authorities sparked a diplomatic dispute.
Canada exports many commodities, including oil, and runs a current account deficit, so its economy stands to benefit if the outlook improves for the global flow of trade and capital.
Stocks rose as Trump’s comments fueled optimism over trade negotiations between the United States and China, while the price of oil was supported by an industry report that showed a drop in U.S. crude inventories, a cut in Libyan exports and an OPEC-led deal to trim output.
U.S. crude oil futures were up nearly 2 per cent at $52.67 a barrel.
The Canadian dollar was trading 0.3 per cent higher at 1.3346 to the greenback, or 74.93 U.S. cents. The currency traded in a range of 1.3340 to 1.3398.
U.S. stocks jumped at open on Wednesday as the Wall Street Journal report about China’s plans to increase access for foreign firms added to earlier optimism on trade from Trump’s upbeat comments.
The Dow Jones Industrial Average rose 138.85 points, or 0.57 per cent, at the open to 24,509.09.
The S&P 500 opened higher by 21.45 points, or 0.81 per cent, at 2,658.23. The Nasdaq Composite gained 95.17 points, or 1.35 per cent, to 7,127.00 at the opening bell.
The gains come a day after another volatile session ended with Wall Street finishing slightly lower following Trump’s threat to shut down the U.S. government and political uncertainty in Britain.
“There maybe some near-term optimism because of the trade headlines but we’ll see where it goes,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
“We have seen a lot of intraday movement lately and we might see the same today and that’s a sign the market is looking at what the appropriate level should be.”
In the seven sessions in December, the three indexes have shed more than 4 percent in volatile trading, weighed down by fears over global growth, U.S.-China relations, interest rates and growing complications over Britain’s planned divorce from the European Union.
British Prime Minister Theresa May faces a no-confidence vote later in the day, triggered by Conservative lawmakers, with the result expected at 4 p.m. ET.
“I’m surprised that the news on UK vote on May is not affecting the markets more,” Brown said.
Reuters