Canada’s main stock index sat slightly higher on Thursday, as oil prices reversed course to trade higher, resulting in gains in energy shares.
At 11:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite Index was up 11.32 points, or 0.07 per cent, at 15,182.57.
The energy sector increased 1.4 per cent, on track to snap a four-day losing streak. Oil prices rose after industry sources said Russia had accepted the need to cut production, along with OPEC members.
A recent drop in U.S. crude prices has had a negative impact on Canada’s oil patch with the energy sector down more than 26 per cent during the year.
Cenovus Energy Inc. rose 3.1 per cent, while Canadian Natural Resources Ltd. increased 2.2 per cent. Husky Energy Inc. and Seven Generations Energy Ltd. were up 1.7 per cent.
Also lifting sentiment in Canada’s commodity-linked stock market was a 0.5-per-cent rise in the materials sector.
Canfor Corp. was up 4.4 per cent, while West Fraser Timber Co Ltd. increased 3.6 per cent.
Gold rose after U.S. Federal Reserve Chair Jerome Powell’s comments boosted perceptions the central bank would go slow on interest rate hikes next year.
U.S. stocks are lower Thursday morning after huge gains the day before. Technology and internet companies are taking some of the largest losses and banks are down with interest rates. The S&P 500 index is coming off its largest rally in eight months and has climbed 3.5 per cent this week. Deutsche Bank skidded after German authorities searched its offices on suspicion some of the bank’s employees helped clients launder money.
The S&P 500 index lost 18 points, or 0.7 per cent, to 2,724 at 11:20 a.m. Eastern time. It soared 2.4 per cent Wednesday. The Dow Jones Industrial Average slipped 153 points, or 0.6 per cent, to 25,209. The Nasdaq composite shed 58 points, or 0.8 per cent, to 7,232. The Russell 2000 index of smaller-company stocks fell 9 points, or 0.6 per cent, to 1,521.
Stocks surged after Federal Reserve Chairman Jerome Powell suggested in a speech that the Fed might be almost done raising interest rates, and is willing to stop raising rates at least temporarily so it can assess the effects of the last few years of increases. Investors were happy to hear that, as they’ve been nervous that climbing interest rates will contribute to a damaging slowdown in economic growth. That fear is one of the major reasons behind the stock market’s recent slide.
U.S. bond prices rose. The yield on the 10-year Treasury note fell to 3.01 per cent from 3.04 per cent as investors expected slower increases in interest rates. That hurt banks, which make less money from mortgages and other types of loans when rates fall. Bank of America shed 1.2 per cent to $28.08 and Citigroup slid 1 per cent to $64.93.
German authorities suspect that Deutsche Bank employees helped clients set up offshore companies in tax havens to launder hundreds of millions of euros. A prosecutor in Frankfurt said the investigation focuses on two employees and possibly other suspects. Deutsche Bank stock lost5 per cent to $9.40. It’s down 51 per cent so far this year.
Qualcomm stock jumped 2.7 per cent to $58.16 after Qualcomm CEO Steve Mollenkopf said the company is close to resolving its long and costly dispute with Apple. Apple stopped making licensing fee payments to Qualcomm following a legal dispute between the companies, and later decided to stop using Qualcomm parts in some of its products.
But other technology companies fell. Apple slipped 1.7 per cent to $177.81 and Microsoft dipped 1.5 per cent to $109.45. Intel lost 1.8 per cent to $7.97.
Consumer spending and incomes both climbed in October. The Commerce Department said both figures grew much faster than they did in September. Those are both good signs for future economic growthThe dollar slid to 113.38 yen from 113.53 yen. The euro dipped to $1.1368 from $1.1376.
European stocks rose following Wednesday’s large gains in the U.S. The FTSE 100 in Britain and the French CAC 40 both rose 0.6 per cent. Germany’s DAX was little changed.
Tokyo’s Nikkei 225 rose 0.4 per cent and Seoul’s Kospi advanced 0.3 per cent while Hong Kong’s Hang Seng shed 0.9 per cent.
Oil reversed course and rose on Thursday, after industry sources said Russia had accepted the need to cut production together with OPEC.
The price is still set for its biggest monthly fall since the depths of the financial crisis in 2008, having lost more than 22 per cent so far in November.
A seemingly relentless rise in U.S. crude supply, together with Saudi Arabia’s insistence that it will not cut output on its own to stabilize the market, earlier sent Brent crude to a fresh 2018 low below $58 a barrel.
The Russian Energy Ministry held a meeting with the heads of domestic oil producers on Tuesday, before a gathering in Vienna of the Organization of the Petroleum Exporting Countries and its allies on Dec. 6-7.
“The idea at the meeting was that Russia needs to reduce. The key question is how quickly and by how much,” said one source familiar with the talks between Russian oil firms and the ministry.
Brent crude futures were last up 45 cents on the day at $59.25 a barrel, off an earlier session low of $57.50, while U.S. crude futures gained 75 cents to trade at $51.04.
Russian President Vladimir Putin, whose country is the world’s second biggest oil producer, said on Wednesday he was in touch with OPEC and ready to continue cooperation on supply if needed, but he was satisfied with an oil price of $60.
U.S. crude inventories hit their highest in a year, and are now only 80 million barrels below March 2017’s record 535 million barrels, according to the Energy Information Administration.
“WTI oil is now trading right around the $50 per barrel level, a price last seen well over a year ago, as the current oversupply situation has now manifested itself in 10 consecutive weekly increases in U.S. oil inventories,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.