The Canadian stock market had a quiet session Monday as Wall Street was closed for a holiday, with the S&P/TSX Composite Index closing with a modest gain despite a pullback in energy equities.
The benchmark index closed up 35.85 points, or 0.20%, at 17,944.88. While most sectors edged higher, energy stocks closed down 1.58% amid oil prices falling slightly, as a stronger U.S. dollar, fears over soaring COVID-19 cases around the world and the slow pace of vaccination against the coronavirus outweighed a better-than-expected quarterly rebound for China’s economy.
Meanwhile, TC Energy Corp lost 4.54% after news surfaced Sunday that U.S. president-elect Joe Biden plans to terminate the Keystone XL pipeline project as one of his first acts in office. Outgoing President Donald Trump signed the construction permit in 2017.
Lithium Americas Corp. shot up 18.35% in heavy volume, following news in the post market on Friday that the company received a positive decision from U.S. regulators to proceed with its Thacker Pass lithium project in Nevada.
In Asia, Chinese blue chips gained 1.1% after the economy was reported to have grown 6.5% in the fourth quarter over a year earlier, topping forecasts of 6.1%.
Industrial production for December also beat estimates, although retail sales missed expectations.
Recent price action in markets has prompted investors to discuss whether asset markets may be overvalued.
In a monthly letter to clients last week, Mark Haefele, chief investment officer at UBS Global Wealth Management, said all of the preconditions for a bubble were in place.
“Financing costs are at record lows, new participants are being drawn into markets, and the combination of high accumulated savings and low prospective returns on traditional assets create both the means and the desire to engage in speculative activity,” he said.
He warned that in the months ahead investors would need to pay particular attention to “risks of a monetary policy reversal, rising equity valuations, and the rate of the post-pandemic recovery”.
Haefele said however that while he saw pockets of speculation, the broader equity market was not in a bubble.
The March crude oil contract was down 12 cents at US$52.24 per barrel and the February natural gas contract was down 9.7 cents at nearly US$2.60 per mmBTU.
The February gold contract was up US$6.90 at US$1,836.80 an ounce and the March copper contract was up 0.75 of a cent at US$3.61 a pound.
With files from Reuters and The Canadian Press
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