Canada’s main stock index little changed on Monday, after notching two weeks of gains, as advances in healthcare stocks were stymied by losses in bank shares.
At 11:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index inched up 1.74 points, or 0.01 per cent, at 14,428.88.
The Canadian dollar strengthened to a nearly four-week high against its U.S. counterpart as oil prices climbed and the greenback broadly declined, while investors awaited a Bank of Canada interest rate decision later in the week.
Healthcare sector rose 2.1 per cent, the most among 11 TSX sectors.
The materials sector, which includes precious and base metals miners and fertilizer companies, shed 0.9 per cent. Kinross Gold Corp. was down 2.1 per cent, while Wheaton Precious Metals Corp. lost 1.9 per cent.
The energy sector sat flat, despite an increase in oil prices. Seven Generations Energy Ltd. jumped 3.7 per cent, while Imperial Oil Ltd. lost 1.7 per cent.
The financials sector dropped 0.6 per cent with Royal Bank of Canada and Bank of Montreal dipping 1.0 per cent.
An index of world stocks rose on Monday, extending strong gains logged last week as investors took heart from Friday’s robust U.S. employment data and a message from the U.S. central bank that it would be patient and flexible in policy decisions this year.
Growing bets the Federal Reserve will halt its multi-year rate hike cycle sent the dollar lower across the board, while rising equity markets and support from OPEC production cuts helped lift oil prices.
MSCI’s world equity index, which tracks shares in 47 countries, was up 0.77 per cent, its highest since Dec. 19.
On Friday, Powell told the American Economic Association that the Fed is not on a preset path of rate hikes and that it will be sensitive to the downside risks markets are pricing in.
The comments, coming after a robust U.S. jobs report, helped boost risk sentiment and lift stock markets around the world.
On Monday, U.S. stocks edged higher as investors turned their attention to the latest round of U.S.-China trade talks and a prolonged government shutdown, halting Wall Street’s strong surge from Friday.
U.S. officials are meeting their counterparts in Beijing this week for the first face-to-face talks since U.S. President Donald Trump and China’s President Xi Jinping agreed in December to a 90-day truce in a trade war that has roiled global markets.
China has the “good faith” to work with the United States to resolve trade frictions, the Foreign Ministry said on Monday, as the world’s two largest economies resumed talks in a bid to end their trade dispute.
“Trade has been one of the big factors, along with the budget stalemate, contributing to the climate of fear that we’re seeing,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
The Dow Jones Industrial Average rose 74.9 points, or 0.32 per cent, to 23,508.06, the S&P 500 gained 14.26 points, or 0.56 per cent, to 2,546.2 and the Nasdaq Composite added 58.25 points, or 0.86 per cent, to 6,797.11.
European shares were slightly lower amid lingering worries about the euro zone economy and Brexit. The pan-European STOXX 600 was down 0.29 per cent.
In currency markets, the dollar weakened amid diminished expectations for further U.S. interest rate hikes.
The dollar index, which tracks the greenback versus the euro, yen, sterling and three other currencies, was down 0.48 per cent at 95.722.
“Fed Chair Powell’s comments Friday that policymakers were flexible and ‘listening carefully’ to financial markets helped support the impression that the Fed tightening cycle may slow or pause in the coming months,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.
Interest rate futures traders are now pricing in a partial rate cut for this year, while the Fed has indicated that two rate hikes are likely.
Gold rose and palladium hit a record high as the weaker dollar spurred demand for the metals from holders of other currencies. Spot gold was up 0.27 per cent at $1,288.25 per ounce.
U.S. Treasury prices erased early gains after a private report released on Monday showed growth of U.S. services industries slowed to a five-month low in December, signalling the world’s largest economy is decelerating faster than economists’ forecasts.
Benchmark 10-year notes shed 2/32 in price to yield 2.6640 per cent, from 2.659 per cent on Friday.
Stable equity markets and production cuts by the Organization of the Petroleum Exporting Countries helped oil prices rise for a fifth straight session.
Oil prices climbed about 3 per cent on Monday, rebounding further from 1-1/2-year lows reached in December on support from OPEC production cuts and steadying equities markets.
Brent crude futures rose $1.47 to $58.53 a barrel, a 2.6-per-cent gain. U.S. West Texas Intermediate (WTI) crude futures rose $1.56 to $49.52 a barrel, a 3.3-per-cent gain.
Oil futures have gained about 10 percent since last Monday.
“Momentum is coming back into the market from very depressed price levels,” Petromatrix strategist Olivier Jakob said.
Reuters