World stock indexes were flat to lower on Wednesday with a disappointing forecast from Texas Instruments dragging down chipmaker shares, while the British pound inched up as European Union leaders consider London’s request for a Brexit delay.
An index of semiconductor shares was down more than 2 per cent. Apple shares rose after Morgan Stanley said the iPhone maker’s soon-to-be-launched video streaming service could boost its services revenue.
Sterling inched higher, with European Union leaders expected to grant a three-month extension to the Oct. 31 deadline for Britain’s departure.
“While weaker, the bottom hasn’t fallen out of the pound given that a no-deal Brexit has seemingly been taken off the table,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.
The pound was yanked down to $1.2850 from $1.30 after UK lawmakers put the brakes on the government’s Brexit plans again on Tuesday.
Sterling was last trading at $1.2898, up 0.20 per cent on the day.
Canada’s main stock index fell on Wednesday, pressured by a dour revenue forecast from Rogers Communications.
The Toronto Stock Exchange’s S&P/TSX composite index was down 55.59 points, or 0.34 per cent, at 16,335.93.
Rogers Communications Inc. fell 8.1 per cent after lowering its full-year revenue forecast, triggering a 5.1-per-cent decline in the telecom services index. BCE Inc. and Telus Corp. were down 4.5 per cent and 4.4 per cent, respectively.
The materials sector, which includes precious and base metals miners, was among the few bright spots, was up 0.8 per cent as gold futures rose.
Leading the index were Cronos Group Inc., up 5.7 per cent, MEG Energy Corp., up 5.6 per cent, and Aphria Inc., higher by 4.5 per cent.
Lagging shares were FirstService Corp., down 8.4 per cent, and Altus Group Ltd., lower by 5.5 per cent.
The Canadian dollar rose against the greenback on Wednesday, approaching a three-month high it notched the previous day, as investors expected further divergence in the interest rate policies of the Bank of Canada and the Federal Reserve.
Canada’s central bank, which is due to make an interest rate decision on Oct. 30, has kept its benchmark rate on hold at 1.75 per cent this year, as the domestic economy added jobs at a robust pace and inflation stayed close to its 2 per cent target.
“I think the focus is now more on the Bank of Canada versus the Fed approach to interest rates,” said Hosen Marjaee, senior portfolio manager at Manulife Asset Management. “It seems like the Bank of Canada is going to be steady in the month of October but the Fed is going to cut rates, most likely.”
Money markets expect the Federal Reserve to ease U.S. rates next week for the third time since July. That could lower the range for the Fed’s benchmark rate below the equivalent rate for the Bank of Canada of 1.75 per cent.
Investors are ditching bets that Canada’s central bank will cut interest rates over the coming months, as the domestic economy shows resilience and the federal election result adds to prospects of growth-boosting fiscal spending next year.
Canadian Liberal Prime Minister Justin Trudeau said a middle-class tax cut would be the first order of business for his new minority government, which would seek support in parliament on a case-by-case basis.
The Canadian dollar was trading 0.1 per cent higher at 1.3075 to the greenback, or 76.48 U.S. cents. The currency, which hit a three-month high on Tuesday at 1.3071, traded in a range of 1.3073 to 1.3109.
In New York, the Dow Jones Industrial Average rose 44.87 points, or 0.17 per cent, to 26,832.97, the S&P 500 gained 8.52 points, or 0.28 per cent, to 3,004.51 and the Nasdaq Composite added 15.50 points, or 0.19 per cent, to 8,119.79..
The pan-European STOXX 600 index rose 0.11 per cent and MSCI’s gauge of stocks across the globe shed 0.01 per cent.
In commodity markets, oil jumped after government data showed a surprise draw in U.S. crude stocks.
Benchmark 10-year notes last rose 3/32 in price to yield 1.7555 per cent, from 1.766 per cent late on Tuesday.
Oil rose about 2.5 per cent on Wednesday after government data showed a surprise draw in U.S. crude stocks and as the prospect of deeper output cuts by OPEC and its allies offered support.
U.S. crude stocks fell 1.7 million barrels last week as refineries hiked crude runs by 429,000 barrels per day (bpd) and oil imports fell, the Energy Information Administration said. Analysts had expected an increase of 2.2 million barrels.
Brent crude futures settled at $61.17 a barrel, up $1.47, or 2.5 per cent. West Texas Intermediate (WTI) crude futures rose $1.49, or 2.7 per cent, to end at $55.97 a barrel.
Oil prices had fallen earlier in the session after data on Tuesday from industry group the American Petroleum Institute showed U.S. crude stocks rising more than analysts’ expectations, by 4.5 million barrels to 437 million barrels.
The EIA’s report “has put some buyers in the market, but it will be interesting to see if it lasts. While this will distract from demand destruction, the market will eventually come back to it,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
Reuters