Canada’s main index opened higher on Thursday as strong results from Enbridge boosted the energy sector, while gold miners gained with higher prices for the precious metal.
The Toronto Stock Exchange’s S&P/TSX Composite Index was up 16.75 points, or 0.11 per cent, at 15,927.56.
Enbridge was up 3.3 per cent in early trading after its first-quarter profit handily topped analysts’ forecasts.
The Canadian dollar strengthened to a nearly three-week high against its U.S. counterpart on Thursday as oil prices climbed, while data showing U.S. consumer prices rebounded less than expected in April weighed on the greenback.
The price of oil, one of Canada’s major exports, headed for its largest weekly increase in a month, as the market prepared for potential disruption to crude flows from major exporter Iran in the face of U.S. sanctions.
U.S. crude prices were up 0.1 per cent at $71.24 a barrel.
The U.S. dollar extended losses against a basket of major currencies after the consumer price data. Some investors have been expecting an acceleration in inflation to allow the Federal Reserve to hike interest rates faster.
The Canadian dollar was trading 0.7 per cent higher at $1.2766 to the greenback, or 78.33 U.S. cents. The currency touched its strongest level since April 20 at $1.2743.
The loonie has rebounded as much as 2 per cent since hitting on Tuesday a nearly seven week low at $1.2998.
Wall Street was higher on Thursday as a weaker-than-expected rise in U.S. consumer prices in April cooled inflation fears.
The Dow Jones Industrial Average rose 49.12 points, or 0.20 per cent, at the open to 24,591.66. The S&P 500 opened higher by 7.23 points, or 0.27 per cent, at 2,705.02. The Nasdaq Composite gained 16.00 points, or 0.22 per cent, to 7,355.90 at the opening bell.
A Labor Department report showed its consumer price index rose 0.2 per cent, below the economists’ expectation of 0.3 per cent as rising costs for gasoline and rental accommodation were tempered by a moderation in healthcare prices.
Excluding the volatile food and energy components, core CPI rose 2.1 per cent year-on-year in April, matching March’s increase.
The stock market has been riding on an oil rally for the past two days after President Donald Trump’s decision to withdraw the United States from a nuclear deal with Iran.
Oil prices were on track for their biggest weekly increase in a month on expectations of potential disruption to crude flows from major exporter Iran as the United States plans to reimpose sanctions.
Rising oil prices have helped the S&P 500 energy index outperform other major sectors in the quarter with gains of 12.6 per cent.
“The market wants to see a breakout in a particular sector,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York. “So far we’ve had in energy.”
“If the kind of gains we saw yesterday holds over, people will move into the market. The next level of resistance to watch is probably around where we closed 2,700.”