Canada’s main stock index opened higher on Monday, helped by gains for Bombardier Inc, big banks and railway stocks, while BlackBerry Ltd pulled back after a recent rally.
The Toronto Stock Exchange’s S&P/TSX composite index was up 11 points, or 0.07 per cent, at 15,427.93 shortly after the open. Markets are closed in Britain and the United States.
The Canadian dollar was little changed against its U.S. counterpart on Monday as the price of oil steadied in holiday-thinned trading and ahead of the release of data on the country’s gross domestic product (GDP) due on Wednesday.
U.S. crude prices were up in subdued trading due to public holidays in China, the United States and Britain. Oil is one of Canada’s major exports.
The Canadian dollar was trading at $1.3451 to the greenback, or 74.34 U.S. cents, nearly unchanged.
The currency traded in a range of $1.3399 to $1.3467.
The loonie rose 0.5 per cent last week. It touched its strongest in five weeks on Wednesday after the Bank of Canada was more upbeat than investors had expected as it left interest rates unchanged at 0.5 per cent.
Economists forecast that the Canadian economy grew at a 3.9-per-cent annualized pace in the first quarter after a strong expansion in the second half of 2016.
The country’s trade data for April is due on Friday.
European shares inched lower in quiet trading on Monday with Italian stocks left behind as worries over possible early elections weighed, hitting banks.
Activity was reduced as holidays in major markets such Britain and the United States kept investors away.
The index of the top 50 euro zone stocks slipped 0.1 per cent, while Italian blue chips fell 1.1 per cent, on track to end at their lowest close in over three weeks, while Germany’s DAX added 0.1 per cent.
Weekend reports that Italy’s main parties could converge on a proportional electoral law pointed to growing chances of an election in the autumn, possibly leading to no clear majority.
In an interview on Sunday, former Prime Minister Matteo Renzi said an accord on a proportional voting system was possible though it could result in a coalition government that may have trouble holding together.
“The risk of early elections has suddenly increased to 60 percent,” LC Macro Advisers founder Lorenzo Codogno said. “A hung parliament is thus the most likely outcome.”
Italian banks, already hit by worries surrounding the rescue of two ailing regional lenders Popolare di Vicenza and Veneto Banca lenders, fell 1.8 per cent, dragging euro zone banks down 0.4 per cent.
prices were flat on Monday but remained on an unstable footing as increases in U.S. drilling activity undercut an OPEC-led push to tighten supply.
Trading was subdued due to public holidays in China, the United States and Britain, but the market remains unsettled because of uncertainty over whether the impact of OPEC’s latest action to curb oversupply would be enough to support prices.
Brent crude futures were trading 5 cents higher at $52.20 per barrel at 1311 GMT. The contract ended the previous week down nearly 3 percent.
U.S. West Texas Intermediate (WTI) crude futures were 4 cents higher at $49.84 per barrel.
The Organization of the Petroleum Exporting Countries and some non-OPEC producers pledged last week to extend production cuts of around 1.8 million barrels per day (bpd) until March 2018.
An initial agreement, in place since January, would have expired in June this year.
Commerzbank analyst Carsten Fritsch called Monday’s price moves little more than “intraday noise” but said hints of deeper cuts or a longer extension from OPEC left the market deflated after the final decision.
“They increased expectations to such an extent that nine months was a disappointment,” Fritsch said.
High compliance with the cuts so far was unlikely to last, he said, adding to worries about whether the pledge would dent physical oil stockpiles that remain near record levels.
“The pain for OPEC will increase to such a point that 100 percent compliance is unrealistic,” Fritsch said.
Despite ongoing cuts, oil prices have not risen much beyond $50 per barrel.
OPEC’s success in drawing down inventories may hinge on output in the United States <C-OUT-T-EIA>, which is not participating in the cuts. U.S. production has soared 10 percent since mid-2016 to more than 9.3 million bpd, close to levels in major producers Russia and Saudi Arabia.
U.S. drillers have added rigs for 19 straight weeks, bringing the total 722, the highest number since April 2015 and the longest run of additions on record, according to energy services firm Baker Hughes Inc.
Almost all of the recent U.S. output increases have been onshore, from so-called shale oil fields.
Even if the rig count did not rise further, Goldman Sachs said it estimated U.S. output would increase by 785,000 bpd between the fourth quarter of 2016 and the fourth quarter of 2017 across the Permian, Eagle Ford, Bakken and Niobrara shale plays.
Analysts say that reducing bloated global stocks will be key to reining in oversupply.
“It’s going to be all about inventories and whether they fall as much as OPEC thinks,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.Report Typo/Error