A broad index of world stock markets posted gains for a second straight day, as investors swooned over U.S. technology and energy stocks.
MSCI’s index of global equities gained 0.13 per cent as investors awaited action from U.S. President Donald Trump after a deadline for public comment on additional tariffs on Chinese goods expired.
Canada's main stock index erased early losses, finishing higher on the day despite a small decline in energy stocks.
The S&P/TSX composite index rose 0.23 per cent, or 37.16 points, to 16,094.25.
An 11.1-per-cent jump for Aurora Cannabis Inc. led health care stocks higher on the day. The sector finished up 1.2 per cent, despite a 2.5-per-cent fall for Canopy Growth Corp. and a 0.4-per-cent decline for Aphria Inc.
Despite a jump in oil prices, energy stocks lost 0.1 per cent with Canadian Natural Resources Ltd. falling 1.9 per cent and Imperial Oil Ltd. dropping 1.7 per cent.
Oil prices rose more than 2 per cent on Tuesday as U.S. sanctions squeezed Iranian crude exports and after U.S. crude oil production in 2019 was forecast to grow at a slower rate than previously expected, prompting supply concerns.
Since spring when the Trump Administration said it would impose sanctions on Iran, crude traders have priced in a risk premium reflecting the supply shortages that may occur when exports from the third-largest OPEC member are cut. As the Nov. 4 date for imposing sanctions draws nearer, the premium has increased.
Brent crude futures rose $1.69, or 2.2 per cent, to settle at $79.06 a barrel. U.S. West Texas Intermediate (WTI) crude settled $1.71, or 2.5 per cent, higher at $69.25 a barrel.
Washington has told its allies to reduce imports of Iranian oil and several Asian buyers, including South Korea, Japan and India appear to be falling in line.
The Canadian dollar edged higher against its U.S. counterpart on Tuesday as oil prices jumped and investors grew more optimistic of a deal to renew the NAFTA trade pact.
Canadian Foreign Minister Chrystia Freeland returned to Washington for talks aimed at rescuing the North American Free Trade Agreement. She said discussions between U.S. and Canadian negotiating teams over the weekend were “constructive and productive.”
“I think (there is) a fair bit of optimism on the NAFTA talks,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. “(Talks) seem to be going well, at least from the little snippets we get from Freeland.”
The Canadian dollar was trading 0.3 per cent higher at $1.3130 to the greenback, or 76.16 U.S. cents.
The currency, which had touched on Thursday its weakest in nearly seven weeks at $1.3226, traded in a range of $1.3124 to $1.3175.
The modest gain for the loonie came as stocks on Wall Street were able to shake off concerns over the trade dispute between Washington and Beijing and move higher.
Wall Street continued to climb, with the benchmark S&P 500 stock index still on pace to deliver what once seemed improbable: a 7th year of double-digit percentage gains over the last decade.
Shares of Apple Inc surged 2.5 per cent, a day ahead of the highly anticipated unveiling of the company’s new iPhone models. Energy stocks got a boost from an oil market rally. U.S. markets may see more stimulus this year from additional tax cuts being pondered by congressional Republicans.
The Dow Jones Industrial Average rose 113.99 points, or 0.44 per cent, to 25,971.06, the S&P 500 gained 10.96 points, or 0.38 per cent, to 2,888.09 and the Nasdaq Composite added 45.10 points, or 0.57 per cent, to 7,969.26.
“The fact that Trump still hasn’t announced the tariffs yet as expected has prompted a bit of cautious optimism, but it’s not a problem that’s going to go away,” said CMC Markets analyst Michael Hewson.
Emerging markets remained under pressure, with an index of those countries’ shares down 0.82 per cent. Those markets’ currencies are at their lowest level in more than a year, with some near record lows against the U.S. dollar. Copper, heavily consumed by emerging markets, lost 0.53 per cent to $5,878.50 a ton.
China told the World Trade Organization (WTO) on Tuesday it wanted to impose $7-billion a year in sanctions on the United States in retaliation for Washington’s non-compliance with a ruling in a dispute over U.S. dumping duties.
Having warned last week that he was ready to slap additional taxes on practically all Chinese imports, Trump has been uncharacteristically quiet on trade this week. U.S. trade talks with Canada are also ongoing.
“Weakness is set to remain a recurring theme amid global trade tensions, a broadly stronger dollar and prospects of higher U.S. interest rates,” said Lukman Otunuga, a research analyst at broker FXTM.
“With turmoil in Turkey and Argentina triggering contagion fears, appetite for emerging market assets and currencies is likely to continue diminishing.”