Gold, industrial stocks push TSX higher

Canada’s main stock index rose on Monday with gains in gold and industrial stocks, while a holiday in the United States prompted languid trade.

The Toronto Stock Exchange’s S&P/TSX composite index was unofficially up 38.37 points, or 0.22 per cent, at 17,597.39.

The holiday commemorating slain civil rights leader Reverend Martin Luther King Jr. in the United States resulted in a lack of cues from the U.S.-listed shares of TSX majors.

The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.7 per cent as gold prices rose amid some safe-haven demand.

Industrial stocks rose 0.8 per cent as Bombardier Inc. shares increased 8.9 per cent and Ballard Power Systems Inc. closed 3.5 per cent higher.

Energy lost ground on Monday, sliding 0.1 per cent despite an increase in oil prices.

Leading the index wereWestshore Terminals Investment Corp., up 3.4 per cent, and Alamos Gold Inc., higher by 3.1 per cent.

Lagging shares were Hexo Corp., down 2.9 per cent, Encana Corp., down 2.7 per cent, and Martinrea International Inc., lower by 1.7 per cent.

European shares retreated from recent peaks on Monday as investors paused before launching into a week packed with economic data and the European Central Bank’s first policy meeting of the year.

The pan-European STOXX 600 index was down about 0.1 per cent, after ending at a record high on Friday on optimism around U.S.-EU trade talks. Market activity was thin because of a holiday in the United States.

The benchmark European index has risen about 2 per cent so far this month, as investors bet on a recovery in global growth amid cooling U.S.-China trade tensions.

“We are seeing a little bit of a pullback, having seen a very good run in markets since the start of the year,” said Craig Erlam, senior market analyst at Oanda in London, adding that there was also some profit taking ahead of a “big week” consisting of U.S. corporate earnings and the World Economic Forum in Davos.

Markets will also be watching for the Purchasing Manager’s Index (PMI) from the euro zone on Friday, with a recent Reuters poll showing that economists expect a slowdown in the bloc to have bottomed out in 2019.

Comments from ECB Chief Christine Lagarde at the central bank’s first policy meeting for the year on Thursday will also be a point of interest. The bank is expected to keep the deposit rate unchanged after cutting it in September for the first time since 2016.

“We got a massive policy stimulus announced a few months ago, and it’s going to take some time for that to filter through to the financial system. It’s unlikely that the ECB is going to act in the aftermath of that so soon,” Oanda’s Erlam said.

Oil prices rose to their highest in more than a week on Monday after two large crude production bases in Libya began shutting down amid a military blockade, risking reducing crude flows from the OPEC member to a trickle.

Brent crude was up 51 cents, or 0.8 per cent, at $65.36, having earlier touched $66 a barrel, its highest since Jan. 9.

West Texas Intermediate was up 27 cents, or 0.5 per cent, at $58.81 a barrel, after rising to $59.73, the highest since Jan. 10.

Two major oilfields in southwest Libya began shutting down on Sunday after forces loyal to Khalifa Haftar closed a pipeline, potentially cutting national output to a fraction of its normal level, the National Oil Corporation (NOC) said.

NOC declared force majeure on crude loadings from the Sharara and El Feel oilfields, according to a document seen by Reuters.

The closure, which follows a blockade of major eastern oil ports, risked taking almost all the country’s oil output offline.

Reuters

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