The Toronto stock market was higher Tuesday as traders hoped for a quick end to the U.S. government’s partial shutdown which began at midnight due to a political impasse in Washington.
The S&P/TSX composite index rose 42.48 points to 12,829.67.
Falling commodity prices helped push the Canadian dollar down 0.09 of a cent to 96.97 cents US, even as the American dollar weakened against other currencies.
U.S. indexes were higher even though a sharply divided Congress failed to approve a short-term funding agreement before midnight.
The Dow Jones industrials ticked 13.74 points higher to 15,143.41, the Nasdaq climbed 16.02 points to 3,787.5 and the S&P 500 index gained 5.43 points to 1,686.98.
The clock is also ticking towards an even more worrisome prospect, an Oct. 17 deadline when the U.S. government hits its debt limit and begins to run out of cash to pay its bills.
“The bigger market risk event remains a breach of the debt ceiling,” said a commentary from Barclays Research.
“We expect such an event to be more broadly risk negative. A higher risk of a U.S. sovereign default should lead to a flight to liquidity and, ironically, a stronger U.S. dollar.”
Some critical parts of the government, from the military to air traffic controllers, will remain open, and analysts said significant damage to the country’s economy was unlikely unless the shutdown lasted more than a few days.
Industrial stocks led TSX gainers with Canadian National Railway (TSX:CNR) ahead $1 to $105.37.
The financials sector was also supportive as Manulife Financial (TSX:MFC) advanced 20 cents to $17.24.
The energy sector gained 0.55 per cent while oil prices were lower for a third day amid worries about the effect of the shutdown on the U.S. economy and weak Chinese manufacturing data. The November crude contract on the New York Mercantile Exchange dropped 61 cents to $101.72 (U.S.) per barrel. Talisman Energy (TSX:TLM) improved by 10 cents to $11.92.
The TSX was dragged down by the gold sector as prices for the traditional safe haven fell back. The December contract fell $36.10 to $1,290.90 (U.S.) an ounce and the component fell 2.3 per cent. Barrick Gold Corp. (TSX:ABX) dropped 46 cents to $18.72.
The base metals sector was down 1.65 per cent while metal prices were lower with December copper down six cents at $3.26 a pound. First Quantum Minerals (TSX:FM) shed 51 cents to $18.67.
In corporate news, real estate services company FirstService Corp. (TSX:FSV) has sold Field Asset Services, a business that provides property services in the United States, for $55-million cash to Assurant Inc. (NYSE:AIX). FirstService shares added two cents to $39.98.
European bourses were mixed as data showed that unemployment across the eurozone held steady in August, in another sign that the euro zone economy is stabilizing following its longest-ever recession.
Eurostat, the EU’s statistics office, said the unemployment rate was 12 per cent in August, unchanged from the previous month and down modestly from the 12.1 per cent peak recorded in the summer.
London’s FTSE 100 index down 0.44 per cent, Frankfurt’s DAX gained 0.3 per cent while the Paris CAC 40 was ahead 0.7 per cent.
Earlier in Asia, Japanese stocks rose after a business survey showed mounting confidence among the country’s manufacturers.
The Nikkei 225 in Tokyo advanced 0.2 per cent after the latest quarterly “tankan” survey showed a sharp improvement from the prior period. Large manufacturers were especially upbeat, with a reading of positive 12, up from 4 in the July survey.
Elsewhere, South Korea’s Kospi settled 0.1 per cent higher and Australia’s S&P/ASX 200 fell 0.2 per cent.
Markets in mainland China and Hong Kong were closed for public holidays and couldn’t react to a survey showing that manufacturing in the world’s second-biggest economy barely expanded in September.
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- Before the bell: Stocks rise despite government shutdown