S&P/TSX composite moves up on energy gains as crude hits 2 1/2 year high

·4 min read

TORONTO — Canada's main stock index inched closer to the historic 20,000-point mark on gains from the energy sector as crude prices rose to a two-and-a-half-year high.

The S&P/TSX composite index closed up 28.94 points to 19,774.41 after hitting an intraday high of 19,835.27.

In New York, the Dow Jones industrial average was up 141.59 points at 34,464.64. The S&P 500 index was up 4.89 points at 4,200.88, while the Nasdaq composite was down 1.72 points at 13,736.28.

"Canada keeps going up and up," said Michael Currie, vice-president and investment adviser at TD Wealth.

The Toronto market has climbed 13.4 per cent so far in 2021, ahead of a 12.6 per cent gain by the Dow, 11.8 per cent by the S&P and 6.6 per cent by the tech-heavy Nasdaq.

"After so many years and long stretches of being the underdogs to the States, it's nice to see us beating them for a change."

Energy has been a big contributor, powered by a 37.8 per cent increase in crude oil prices.

The sector gained about one percentage point Thursday as crude oil prices rose to their highest level since Oct. 29, 2018.

The July crude oil contract was up 64 cents at US$66.85 per barrel and the July natural gas contract was down 6.9cents at US$2.96 per mmBTU.

Shares of Vermilion Energy Inc. rose 3.4 per cent and Crescent Point Energy Corp. was 2.1 per cent higher.

Prices rose on a drawdown of U.S. oil inventories, which was partly offset by ongoing concerns that a prospective Iranian nuclear deal would add half a million barrels per day to global supplies.

"The trend is still pretty nice and positive but not a big move today," Currie said in an interview.

The Canadian dollar traded for 82.83 cents US compared with 82.58 cents US on Wednesday.

Consumer discretionary led the TSX as auto parts manufacturers Martinrea International Inc., Linamar Corp. and Magna International Inc. were up 5.6, 4.1 and 3.6 per cent, respectively.

The shares climbed as Ford and General Motors are forecasting a big shift to the production of electric vehicles.

The heavyweight financials sector was also strong after stellar quarterly bank results pushed CIBC up 2.9 per cent and Royal Bank up 1.3 per cent, but TD shares lost 2.5 per cent.

BMO and the three banks reporting Thursday posted solid results that beat expectations with loan loss provisions being lower than expected.

"These institutions are all thinking the vaccines are starting to roll out, people are going back to work, things are reopening, you've got to start seeing some more loan business," said Currie.

"People were looking for good news but it's a little bit better than we were expecting."

Materials slipped on lower gold prices although copper prices were higher. Barrick Gold Corp. was off 5.2 per cent while forestry company Interfor Corp. was down 4.5 per cent.

The August gold contract was down US$5.30 at US$1,898.50 an ounce and the July copper contract was up 13.35 cents at US$4.66 a pound.

U.S. stock markets were relatively soft despite strong economic growth last quarter and improving unemployment claims.

The annualized U.S. GDP growth was 6.4 per cent last quarter while the number of people claiming first-time benefits dipped for a third straight week to a pandemic low of 406,000 last week.

Currie attributed the market performance to ongoing concerns about inflation.

"It just keeps coming up day after day after day and that's putting a little lid on some of the gains in New York."

This report by The Canadian Press was first published May 27, 2021.

Companies in this story: (TSX:IFP, TSX:ABX, TSX:CM, TSX:RY, TSX:TD, TSX:BMO, TSX:VET, TSX:CPG, TSX:MRE, TSX:LNR, TSX:MG, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press

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