Business and Economy
Resource stocks help Toronto stock market inch higher after Thursday’s drop
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TORONTO – Resource stocks helped the Toronto stock market inch to a slightly higher close on Friday, while south of the border stocks tumbled for a second straight session.
The TSX/S&P composite index gained 14.37 points to 13,024.30, after plunging 156.15 points the previous day as commodities took a beating and investors digested the interest rate hike south of the border.
Patrick Blais, managing director and senior portfolio manager at Manulife Asset Management, said some of the strength in the Canadian stock market, relative to the U.S., was related to materials and energy stocks.
“Those are two sectors that have been decimated, so it’s to be expected that you will have more volatility,” said Blais. “Given how far down they’ve dropped, there’s definitely value in the two sectors.”
The metals and mining sector of the TSX rose 6.76 per cent, while global gold climbed 3.10 per cent and materials gained 2.81 per cent. Meanwhile, energy stocks closed 1.93 per cent higher.
Meanwhile, the loonie rose 0.03 of a U.S. cent to 71.71 cents US, a day after slipping below 72 cents US for the first time since May 2004.
In New York, the Dow Jones average of 30 stocks plummeted 367.29 points to 17,128.55, the broader S&P 500 index gave back 36.34 points to 2,005.55 and the Nasdaq fell 79.47 points to 4,923.08.
As investors wrapped up the last full trading week before the holidays, Blais says they will be looking ahead to the new year for indications as to how fast the U.S. Federal Reserve will raise its key interest rates.
“The Fed seems to be much more hawkish than the market,” said Blais. “There’s a fear that they may tighten at a quicker pace than the market currently expects.”
On the commodity markets, the February gold contract rose $15.40 to US$1,065.00 an ounce, the January crude contract declined 22 cents to US$34.73 per barrel and the January contract for natural gas was up 1.2 cents at US$1.767 per mmBtu.
March copper rose seven cents to US$2.11 per pound.
Shares of Bombardier (TSX:BBD.B) rose 16.24 per cent, or 19 cents, to $1.36 as the company’s CSeries commercial aircraft received certification from Transport Canada, following years of delays and cost overruns. Meanwhile, Reuters reported that Pierre Beaudoin, the Montreal-based company’s executive chairman, will step down next year, but the company dismissed the report as “pure speculation.”
Meanwhile, Shaw Communications Inc. (TSX:SJR.B) saw its shares slip 5.02 per cent, or $1.25, to $23.65 as investors continued to digest the news that the Calgary-based cable provider will purchase Wind Mobile for $1.6 billion.
