S&P/TSX slips but ends March higher for fourth-straight quarterly gain

·4 min read

TORONTO — A resurgence in the tech sector helped power Canada's main stock index to its fourth-straight quarterly gain despite dipping for the day.

The S&P/TSX composite index lost 4.89 points to 18,700.67 after plunging just before the close of trading.

It ended up 3.5 per cent in March and rose 7.3 per cent in the opening quarter of 2021.

In New York, the Dow Jones industrial average was down 85.41 points at 32.981.55. The S&P 500 index rose 14.34 points to 3,972.89, while the tech-heavy Nasdaq composite was up 201.47 points at 13,246.87.

"It's been a strong quarter for equity markets and for the month it's been quite broad-based," said Ryan Crowther, portfolio manager at Franklin Templeton Canada.

"What we saw particularly since late February is a clear shift in investor sentiment that's being driven more by fundamentals and valuation rather than just investing on themes and trends."

After opening the week with a more cautious tone, there were some sharp rallies for most of Wednesday as the S&P 500 set an intraday record high before posting its best month since November.

Canada's tech sector climbed 1.3 per cent on the day.

Shopify Inc. regained its position as Canada's most valuable company as its shares increased 4.75 per cent, but still remain down 27 per cent from the highs of only seven weeks ago.

Lightspeed POS Inc. increased 4.7 per cent while shares of BlackBerry Ltd. slumped 10.5 per cent after reporting quarterly results that missed expectations.

The health-care sector gained 1.7 per cent as legalization of cannabis in New York state gave a boost to Aphria Inc. and Aurora Cannabis Inc., which rose 3.7 and 2.3 per cent, respectively.

Materials was also higher as gold prices rebounded Wednesday but were down 9.5 per cent for the quarter.

The June gold contract was up US$29.60 at US$1,715.60 an ounce and the May copper contract was up 1.7 cents at US$4.00 a pound.

"Gold's been very weak since breaking through US$2,000 last summer and the gold price is now almost fully round trip from where it was a year ago and you could say the same thing for many of the gold stocks," Crowther said in an interview.

The TSX shifted negative on decreases by the heavyweight financials sector, energy and telecommunications.

Financials lost one percentage point with shares of Laurentian Bank down 2.8 per cent and Brookfield Asset Management Inc. off 2.4 per cent.

Energy fell ahead of Thursday's OPEC meeting that will decide if production cuts will continue.

The May crude oil contract was down US$1.39 at US$59.16 per barrel and the May natural gas contract was down 1.5 cents at nearly US$2.61 per mmBTU.

Imperial Oil shares decreased two per cent and Vermilion Energy Inc. was down 1.9 per cent.

The Canadian dollar traded for 79.52 cents US compared with 79.17 cents US on Tuesday.

Rogers Communications Inc. lost 2.8 per cent to push the sector lower on the day.

Canada's strong GDP numbers for January gave a boost to investor sentiment, said Crowther.

The Canadian economy grew 0.7 per cent in January in the face of severe public health restrictions, and appears to have grown almost as much in February, Statistics Canada said Wednesday.

It was the ninth consecutive monthly increase since the plunge in the economy last year at the start of the pandemic in March and April when workers were ordered home and non-essential businesses forced to close.

"Those numbers are definitely providing some level of confidence and optimism around some visibility to an economic recovery," Crowther said.

Market sentiment is generally positive, although it's unclear how much a recovery is already baked in to stock valuations, he noted.

"I think 2021 is probably going to be a market where investors are rewarded for doing their homework rather than just being rewarded for following the herd."

This report by The Canadian Press was first published March 31, 2021.

Companies in this story: (TSX:RCI.B, TSX:BB, TSX:LSPD, TSX:SHOP, TSX:APHA, TSX:ACB, TSX:IMO, TSX:VET, TSX:LB, TSX:BAM.A, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press