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The close: TSX reaches new high as technology, financial stocks gain; Hydro One declines

Canada’s main stock index rose on Thursday to a new record as gains in technology, industrial and financial stocks downplayed concerns of escalating U.S.-China trade war, which had pushed markets to losses a day earlier.

The Toronto Stock Exchange’s S&P/TSX Composite Index rose 150.10 points, or 0.91 per cent, to 16,567.42.

All of the index’s 11 major sectors were higher, led by the tech sector, which was up 3 per cent. Shopify rose 3.8 per cent, Constellation Software added 4.6 per cent and BlackBerry was up 1.9 per cent.

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Consumer staples gained 1.8 per cent as grocers Metro Inc. rose 2.5 per cent and Alimentation Couche-Tard added 3.2 per cent. Telecom services added 1.5 per cent as Rogers gained 1.7 per cent.

The financials sector climbed 0.7 per cent with Royal Bank of Canada up 0.9 per cent and Brookfield Asset Management up 1.8 per cent.

Shares of Hydro One dropped 3.2 per cent after the exit of CEO Mayo Schmidt and the company’s board following pressure from the new Conservative government in Ontario.

The Canadian dollar strengthened against its U.S. counterpart as investor appetite for risk recovered and after the Bank of Canada raised interest rates on Wednesday. The loonie was trading at 75.95 cents US.

The energy sector climbed 0.6 per cent as oil rose slightly after Libya said it would resume oil exports and shrugged off a warning from the International Energy Agency which said the world’s oil supply cushion “might be stretched to the limit” due to production losses.

The biggest contributor to the TSX gain was Canadian National Railway Co. with 10.1 net index points. Financials was the top sector contributor with 37.8 net points.

Leading the index were Cogeco Communications, up 8.9 per cent, Birchcliff Energy, up 5.1 per cent, and Constellation Software, higher by 4.6 per cent.

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Lagging shares were Baytex Energy, down 2.6 per cent and Endeavour Mining, lower by 2.2 per cent.

The most heavily traded shares by volume were Bombardier, Baytex Energy and Aurora Cannabis.

Domestic data showed Canadian new home prices were unchanged in May for a third straight month, while another piece of data showed Canadian home prices rose in June.

U.S. stocks climbed on Thursday as top technology names hit record highs and industrials rebounded, offsetting worries about a U.S.-China trade war.

The Dow Jones Industrial Average rose 225.45 points, or 0.91 per cent, to 24,925.9, the S&P 500 gained 24.31 points, or 0.88 per cent, to 2,798.33 and the Nasdaq Composite added 107.31 points, or 1.39 per cent, to 7,823.92.

Facebook, Microsoft and Amazon hit all-time intraday highs and along with Apple and Alphabet powered the S&P 500 and Nasdaq higher.

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The technology index rose 1.8 per cent, the day’s best-performing sector, and the group is now leading year-to-date gains among sectors. Industrials rose 1.1 per cent, while the defensive utilities sector, which had outperformed recently, was up only 0.1 per cent.

Helping the tech sector is the view that those companies may be more immune to potential trade dispute problems, said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

But also, she said, “The consensus is that negotiations will resume and there will be some sort of agreement between the U.S. and China. It could be naive, but that seems to be an emerging consensus within the market.”

The United States late Tuesday threatened to impose tariffs on US$200-billion worth of Chinese goods. China said on Thursday the two countries have not been in touch about restarting talks and while it does not want a trade war, it would fight if necessary.

Boeing and Caterpillar, among the hardest hit by the recent trade dispute, rose, boosting the Dow.

Within tech, CA Inc. jumped 18.7 per cent after chipmaker Broadcom announced a surprise US$18.9-billion deal to buy the business software company. Broadcom slumped 13.7 per cent.

Weekly jobless claims hit a two-month low last week, the Labor Department said, in a sign that labour market conditions remained robust in early July.

The consumer price index barely rose in June, but the underlying trend continued to point to a steady buildup of inflation pressure that could keep the Federal Reserve on a path of gradual interest rate increases.

Reporting of quarterly earnings picks up steam on Friday with the big Wall Street banks, and overall S&P 500 companies are expected to post second-quarter profit growth of around 21 per cent, according to Thomson Reuters I/B/E/S.

Delta Air Lines rose 1.8 percent, and lifted other airline stocks, after the carrier’s quarterly profit topped estimates on higher average fares.

With files from Reuters

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