TORONTO — Canada’s main stock index started the week by recovering some of last week’s losses on broad-based gains during a quiet day of trading.
The S&P/TSX composite index closed up 116.62 points to 16,346.66 as volumes were very low due to the Memorial Day holiday that forced the closure of U.S. markets.
“It’s hard to come to any significant conclusions given that the volume would be light today,” said Anish Chopra, managing director with Portfolio Management Corp.
All of the 11 major sectors were positive, led by energy, health care and industrials.
Energy gained 1.73 per cent with Canadian Natural Resources and Suncor Energy Inc. benefiting most as oil prices rose.
The July crude contract was up 60 cents at US$59.23 per barrel and the July natural gas contract was down 3.4 cents at US$2.58 per mmBTU.
West Texas Intermediate rose as Kuwait’s oil minister said he sees more of a balanced oil market coming at the end of 2019 and Russian oil production continuing to fall.
“So between a balanced oil market and then falling supply coming out of Russia that’s positive for the price of oil,” Chopra said.
Industrials climbed on gains by Canadian National Railway and Canadian Pacific Railway, and the technology sector got a boost from Shopify Inc.
The Canadian dollar traded at an average of 74.39 cents US compared with an average of 74.37 cents US on Friday.
The June gold contract was up 80 cents at US$1,284.40 an ounce and the July copper contract was up 1.45 cents at US$2.71 a pound.
“Strong performance in the sectors where you would expect them, some of the underlining commodities are doing quite well,” he added.
Data releases could guide markets over the coming days absent major developments on trade negotiations between China and the U.S.
The Bank of Canada releases its latest rate announcement on Wednesday. Although interest rates aren’t expected to change, the central bank will provide an update on its outlook for the state of the Canadian economy.
On Friday, China’s PMI manufacturing numbers for May will be released, offering a window into the economic activities of the Chinese manufacturing sector.
“If you’re an investor and you’re looking at China’s PMI you’re just looking to see if what looks like a rebound in China’s economy actually is truly a rebound,” said Chopra.
United States inflation numbers will also be released on Friday, indicating whether the country remains in disinflationary territory that may lead the Federal Reserve to cut interest rates should that continue for several months. Inflation was 1.55 per cent in March, below the central bank’s two-per-cent target.
With just a few days of trading in May, the TSX is heading for a losing month after being down 1.4 per cent as of Monday’s close. Nonetheless, the market is up 14 per cent since the beginning of the year.
“If you’re looking at a longer date of returns to have some positive months and some negative months seems reasonable especially after the size of the run that we’ve had between January and April.”