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Equities

Canada’s main stock index opened higher Wednesday with gains in the energy sector helping offset a jump in Canada’s annual rate of inflation to its fastest since 2003. On Wall Street, key indexes were modestly positive as inflation concerns in that country eased but broader economic concerns capped the advance.

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At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 51.7 points, or 0.25 per cent, at 20,604.95. Energy shares jumped more than 2 per cent.

In the U.S., the Dow Jones Industrial Average rose 3.4 points, or 0.01 per cent, at the open to 34580.95. The S&P 500 rose 4.4 points, or 0.10 per cent, at the open to 4447.49, while the Nasdaq Composite rose 33.6 points, or 0.22 per cent, to 15071.34 at the opening bell.

“Thinking about the low U.S. inflation data [on Tuesday], ostensibly receding tapering fears, as an aftermath should have been positive for equities at the margins,” OANDA senior analyst Jeffrey Halley said.

“Instead, Wall Street fell, and the U.S. dollar remained firm. That is probably a warning side that the downside is the path of least resistance for the remainder of the week.”

Mr. Halley also noted that weaker-than-expected economic data out of China on Wednesday also tempered risk sentiment. New figures showed China’s industrial production rose 5.3 per cent in August, marking the weakest pace since July 2020. Retail sales, meanwhile, rose 2.5 per cent, well below the 7-per-cent increase economists had been forecasting.

In this country, investors got a look at the inflation picture in August.

Statistics Canada says the annual rate of inflation rose to 4.1 per cent, up from July’s 3.7 per cent. Economists had expected the annual rate to come in closer to 4 per cent. The August rate was the highest since 2003.

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On the corporate side, shares of Apple Inc. were down 0.86 per cent just before 10:30 a.m. ET in the wake of the tech giant’s latest product launch, which saw the company unveil its newest iPhone.

“The iPhone 13 will have the new A15 bionic chip, better graphics and longer lasting better batteries which will provide up to 2 hours of extra battery life give or take, while the phones have also had upgrades to their cameras,” Michael Hewson, chief market analyst with CMC Markets U.K., said.

“Other than that, the upgrades were fairly minimal, and one wonders whether the lack of innovation in terms of improvements to the current product line was over concern about sourcing huge amounts of new chipsets,” he said.

Elsewhere, The Globe’s Eric Atkins reports that Kansas City Southern has officially terminated its takeover agreement with Canadian National Railway Co., throwing its support behind a rival offer from Canadian Pacific Railway Ltd. The Missouri-based railway said on Wednesday its board has recommended CP’s US$27.2-billion takeover to shareholders, who must approve the deal at an upcoming vote. KCS will pay CN termination fees worth US$1.4-billion, an amount that will be covered by CP.

CN stock was up more than 3 per cent in early trading in Toronto. CP stock was also higher.

Overseas, the pan-European STOXX 600 was down 0.13 per cent in morning trading. Britain’s FTSE 100 edged up 0.03 per cent. Germany’s DAX and France’s CAC 40 slid 0.02 per cent and 0.21 per cent, respectively.

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In Asia, Japan’s Nikkei lost 0.52 per cent. Hong Kong’s Hang Seng closed down 1.84 per cent. The Hang Seng has now lost more than 1 per cent in each of the last three consecutive sessions.

Commodities

Crude prices advanced after new figures showed a bigger-than forecast decline in weekly U.S. inventories.

The day range on Brent is US$73.78 to US$74.40. The range on West Texas Intermediate is US$70.65 to US$71.29.

“Oil prices remained firm overnight, despite the lower than forecast U.S. CPI data,” OANDA’s Jeffrey Halley said. “Both Brent crude and WTI recorded small increases leaving them at the top of their September ranges.”

Prices were bolstered by figures from the American Petroleum Institute that showed crude stocks fell by 5.4 million barrels for the week ending Sept. 10. That was more than the 3.5 million barrel decline analysts had been expecting.

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Gasoline and distillate stocks also fell last week in the wake of hurricane Ida, which shut refineries and production in the Gulf of Mexico region.

More official figures are due later Wednesday morning from the U.S. Energy Information Administration.

In other commodities, gold was steady, trading above US$1,800 an ounce.

Spot gold was little changed at US$1,802.21 per ounce, after hitting a one-week peak of US$1,808.50 on Tuesday.

U.S. gold futures eased 0.2 per cent to US$1,804.30.

“With the CPI data coming in a bit lower than expected, for some that does push a possible (taper) announcement a little bit further down the road and that should be fairly supportive for gold prices,” ING analyst Warren Patterson said.

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Currencies

The Canadian dollar was modestly higher as its U.S. counterpart slid against a group of currencies in the wake of tamer-than-expected U.S. inflation figures.

The day range on the loonie is 78.68 US cents to 78.95 US cents. The loonie held early gains after Statscan reported the annual rate of inflation in August rose to 4.1 per cent, higher than forecast.

On Tuesday, figures from the U.S. Labor Department showed underlying consumer prices rose at their slowest pace in six months in August.

The U.S. dollar index stood at 92.536, about 0.2 per cent lower on the day from Tuesday, when it dropped following the inflation data only to recover as sliding stocks pushed investors toward safe-haven holdings, according to Reuters.

The index has traded between 92.3 and 92.9 over the past week as several Fed officials have suggested the U.S. central bank could reduce its bond purchases by the end of the year.

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Elsewhere, the euro was largely unchanged against the greenback at US$1.1816 on Wednesday.

The U.S. dollar slipped slightly to a three-week low of 109.44 yen, holding near the centre of the trading range of the past two months.

More company news

DavidsTea Inc. is keeping the company’s leadership within the family as its co-founder retires from the company’s board of directors and is replaced by his wife, the former CEO of insolvent clothing retailer Le Chateau. The Montreal-based beverage company, which itself completed creditor proceedings, says principal investor Herschel Segal stepped down and was replaced as chairman by Jane Silverstone Segal. Also joining them on the board is their daughter Sarah, who is chief executive.

Teck Resources Ltd, is exploring options for its metallurgical coal business, including a sale or spinoff that could value the unit at as much as $8-billion, Bloomberg News reported on Tuesday, citing sources. The company is working with an adviser as it looks for strategic alternatives for the unit, the report said.

Economic news

(8:30 a.m. ET) Canada’s CPI for August.

(8:30 a.m. ET) U.S. import prices for August.

(8:30 a.m. ET) U.S. Empire State Manufacturing Survey for September.

(9 a.m. ET) Canada’s existing home sales for August.

(9 a.m. ET) Canada’s average home prices for August.

(9 a.m. ET) Canada’s MLS Home Price Index for August.

(9:15 a.m. ET) U.S. industrial production for August.

With Reuters and The Canadian Press

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