Canada’s main stock index opened higher on Monday as a rise in oil prices lifted shares of energy companies.

The Toronto Stock Exchange’s S&P/TSX composite index was up 37.05 points, or 0.23 per cent, at 16,127.32.

Oil prices rose on Monday as U.S. drilling stalled and investors anticipated lower supply once new U.S. sanctions against Iran’s crude exports kick in from November.

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Brent crude oil jumped $1.09 a barrel, or 1.4 per cent, to a high of $77.92, but then eased to $77.60. U.S. light crude was 55 cents higher at $68.30.

“A higher oil price scenario is built on lower exports from Iran due to U.S. sanctions, capped U.S. shale output growth, instability in production in countries like Libya and Venezuela and no material negative impact from a U.S./China trade war on oil demand in the next 6-9 months,” said Harry Tchilinguirian, oil strategist at French bank BNP Paribas.

U.S. stocks opened higher on Monday as hopes for a fresh round of tax cuts overshadowed fears of an escalation in the trade war between the United States and China.

The Dow Jones Industrial Average rose 75.37 points, or 0.29 per cent, at the open to 25,991.91.

The S&P 500 opened higher by 9.71 points, or 0.34 per cent, at 2,881.39. The Nasdaq Composite gained 37.03 points, or 0.47 per cent, to 7,939.57 at the opening bell.

Republicans in the U.S. House of Representatives plan to unveil a fresh round of tax cuts this week, hoping to draw a sharp contrast between themselves and Democrats ahead of the Nov. 6 congressional elections.

Dubbed “Tax Reform 2.0,” the package is intended to augment Trump’s 2017 tax overhaul, which added $1.5-trillion to the federal deficit through permanent tax cuts for U.S. companies.

“There is definitely a sense that Congress is going to get these tax cuts implemented before the end of this month and the positivity around that could be pushing the markets higher,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

“We will be seeing a relatively strong opening today because the markets are due for a rebound given the negative string we had last week.”

While U.S. markets were poised for an upbeat session, world shares were under pressure due to the escalating rhetoric in the U.S.-China trade war.

On Friday, Trump said he was ready to levy additional taxes on practically all Chinese imports, threatening duties on $267 billion of goods over and above planned tariffs on $200 billion of Chinese products. China said it will respond if Washington takes any new steps on trade.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.9 percent to the lowest since July 2017, extending losses from last week when it dropped 3.5 per cent for its worst weekly showing since mid-March.

Beijing had warned of retaliation if Washington launched any new trade measures. But it is running out of room to match them dollar-for-dollar, raising concern it will resort to other measures, such as weakening the yuan or taking action against U.S. companies in China.

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Chinese shares were battered, with the blue-chip index off 1.4 per cent. Shanghai’s SSE Composite fell 1.2 per cent and Hong Kong’s Hang Seng index shed 1.3 per cent.

Japan’s Nikkei ended 0.3 per cent higher after revised second-quarter data showed the world’s third-biggest economy grew at its fastest pace since 2016 .

Trump, who is challenging China, Mexico, Canada and the European Union on trade issues, has also expressed displeasure about the large U.S. trade deficit with Japan.

The latest 14-month low for emerging-market shares came amid turbulence in Argentina, Turkey, Brazil, Russia and South Africa, where currencies have been routed recently.

Some Asian economies are vulnerable, too, Nomura analysts said, with many countries burdened by high private debt. They also noted a “concentration risk” from some of the world’s largest funds’ heavy investments in emerging-market assets.

The Indian rupee hit a record low of 72.50 per dollar and Indonesia’s rupiah - Asia’s second-worst performer this year - weakened 0.4 percent, near an all-time low .

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“Given the latest comments from Trump, investors are likely to see the potential for further depreciation in EM currencies with the trade war cranking up yet another notch,” said Nick Twidale, Sydney-based analyst at Rakuten Securities Australia.