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Toronto Stock Exchange slips as oil prices retreat from six-week highs

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(Reuters) – Canada‘s main stock index fell on Friday after oil prices slipped on demand concerns, while investors showed scant reaction to data that signalled the country’s economy likely grew in March by 0.9% on-month.

Pulling risk appetite lower was the drop in oil prices amid profit-taking as concerns of wider lockdowns in India and Brazil to curb the COVID-19 pandemic offset a bullish outlook on summer fuel demand and the economic recovery. [O/R]

The Canadian economy grew by 0.4% in February as retail trade rebounded after lockdown measures were eased across parts of the country, Statistics Canada said. A flash estimate showed GDP jumping 0.9% in March.

* At 9:48 a.m. ET (1348 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 40.62 points, or 0.21%, at 19,215.3.

* Five of the index’s 11 major sectors traded lower, led by the IT sector, while the healthcare sector was the biggest gainer.

* The energy sector dropped 0.2% as crude prices retreated.

* The financials sector slipped 0.4%, while the industrials sector rose 0.1%.

* The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.1% as gold futures rose 0.2% to $1,771.8 an ounce. [GOL/] [MET/L]

* On the TSX, 113 issues were higher, while 109 issues declined for a 1.04-to-1 ratio favouring gainers, with 17.66 million shares traded.

* The largest percentage gainers on the TSX were Aurinia Pharmaceuticals <AUP.TO>, which jumped 8.1% and Restaurants Brands International <QSR.TO>, which rose 3.1% after its quarterly results topped estimates, as a reopening U.S. economy and government stimulus checks boosted spending at the company’s Burger King chain.

* Meg Energy Corp <MEG.TO> fell 2.6%, the most on the TSX, followed by Sunopta Inc <SOY.TO>, down 2.2%.

* The most heavily traded shares by volume were B2Gold Corp <BTO.TO>, up 0.3%; Baytex Energy Co <BTE.TO>, down 1.3% and Bank Of Montreal <BMO.TO>, down 0.1%.

* The TSX posted seven new 52-week highs and no new lows.

* Across all Canadian issues, there were 24 new 52-week highs and three new lows, with total volume of 34.65 million shares.

 

(Reporting by Devik Jain in Bengaluru; Editing by Shailesh Kuber and Sherry Jacob-Phillips)

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Toronto Stock Exchange falls 0.1% to 19,290.98

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* The Toronto Stock Exchange’s TSX falls 0.10 percent to 19,290.98

* Leading the index were Endeavour Silver Corp <EDR.TO​>, up 10.0%, ARC Resources Ltd​, up 8.5%, and SSR Mining Inc​, higher by 8.1%.

* Lagging shares were Lithium Americas Corp​​, down 9.0%, Trillium Therapeutics Inc​, down 7.8%, and AcuityAds Holdings Inc​, lower by 7.6%.

* On the TSX 125 issues rose and 102 fell as a 1.2-to-1 ratio favored advancers. There were 25 new highs and 1 new low, with total volume of 244.4 million shares.

* The most heavily traded shares by volume were Enbridge Inc, Manulife Financial Corp and Arc Resources Ltd.

* The TSX’s energy group rose 1.19 points, or 1.0%, while the financials sector climbed 0.56 points, or 0.2%.

* West Texas Intermediate crude futures fell 1.17%, or $0.77, to $64.86 a barrel. Brent crude  fell 1.02%, or $0.7, to $68.26.

* The TSX is up 10.7% for the year.

This summary was machine generated May 6 at 21:24 GMT.

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Economy

Canadian dollar rises by most in 11 months

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By Fergal Smith

TORONTO (Reuters) – The Canadian dollar rose on Thursday to its highest level against its U.S. counterpart in more than three and a half years as the greenback fell broadly and prices of some of the commodities Canada produces surged.

Aluminum approached levels not reached since 2018, bolstered by positive economic data and rising tensions between China and Australia, while copper jumped 1.9% and gold was up more than 1.5%.

“Commodities matter a fair deal to the Canadian economy,” said Michael Goshko, corporate risk manager at Western Union Business Solutions. “When commodity prices strengthen, so too does the Canadian dollar.”

The loonie was trading 1% higher at 1.2145 to the greenback, or 82.34 U.S. cents, its biggest gain since June last year and its strongest level since September 2017.

The currency has been on a tear since the Bank of Canada last month signaled it could begin hiking interest rates in late 2022 and cut the pace of its bond purchases.

“You could be witnessing some market capitulation,” Goshko said. “In the face of an employment report tomorrow that’s supposed to be very negative, it’s quite extraordinary to see it (the loonie) doing so well.”

Analysts expect Canada‘s employment report on Friday to show the economy shed 175,000 jobs in April as restrictions were tightened in some provinces to contain the coronavirus pandemic.

Still, the Canadian dollar is expected to give back some of its recent gains over the coming year as the BoC’s more hawkish stance is offset by a potential dialing back of the U.S. Federal Reserve’s asset purchase program, a Reuters poll showed.

The U.S. dollar on Thursday hit a three-day low against a basket of major currencies.

Canada‘s 10-year yield was little changed at 1.516%, near the middle of its range over the past two months.

 

(Reporting by Fergal Smith; Editing by Mark Heinrich and Dan Grebler)

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Bank of England sees faster economic rebound

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By David Milliken and Andy Bruce

LONDON (Reuters) -The Bank of England said Britain’s economy would grow by the most since World War Two this year and slowed the pace of its trillion dollar bond-purchasing programme, but stressed it was not reversing its stimulus.

Governor Andrew Bailey welcomed the prospect of a stronger recovery than previously forecast as the country races ahead with its coronavirus vaccinations, with much lower unemployment.

But he also said there was still a big gap compared with how big the economy would have been without the pandemic.

“Let’s not get carried away,” Bailey said about the improved outlook. “It takes us back by the end of this year to the level of output that we had essentially at the end of 2019 pre-COVID.”

The BoE raised its forecast for British economic growth in 2021 to 7.25% from February’s estimate of 5.0%.

That would be the fastest annual growth since 1941 when Britain was rearming. But it comes after output plunged by 9.8% in 2020, the biggest drop in more than 300 years.

As well as the vaccines, the growth upgrade reflected a smaller-than-feared hit from a third coronavirus lockdown which began in January and the extension of higher public spending and tax cuts announced by finance minister Rishi Sunak in March.

The economy was set to return to its pre-pandemic size in the last quarter of 2021, three months earlier than previously thought, the BoE said.

But it lowered its projection for growth in 2022 to 5.75% from its previous estimate of 7.25%.

With the economy on course for recovery, the BoE said it would reduce the amount of bonds it buys each week to 3.4 billion pounds ($4.7 billion), down from 4.4 billion pounds now.

“This operational decision should not be interpreted as a change in the stance of monetary policy,” it said.

So far most central banks in rich countries have stressed they are in no hurry to scale back their huge economic support.

But the Bank of Canada said last month it could start to raise rates by late 2022 and pared back its bond-buying.

“While the Bank of England is clearly more positive about the UK economy in the near-term, the Monetary Policy Committee also has significant uncertainties about the longer-term outlook and are seemingly in no hurry to tighten monetary policy,” Howard Archer, an economist with forecasters EY Item Club, said.

The central bank kept its benchmark interest rate at an all-time low of 0.1% and the total size of its bond-buying programme unchanged at 895 billion pounds, as expected by economists polled by Reuters.

BoE Chief Economist Andy Haldane, who has warned of inflation risks, cast a lone vote to cut the bond-buying scheme by 50 billion pounds. Haldane is due to leave the bank in June.

Sterling was little changed against the U.S. dollar and the euro at 1400 GMT.

SMALLER UNEMPLOYMENT HIT

The BoE said it now expected unemployment to rise only slightly to a peak of 5.4% in the third quarter of 2021, when Sunak’s jobs protection programme is due to expire.

Due to this, and an expected short-term boost to investment from government tax incentives, the central bank lowered its estimate of long-term economic scarring to 1.25% from 1.75%.

The BoE said inflation was likely to slightly overshoot its 2% target later this year due to temporary factors mostly related to energy prices.

But it is keeping a closer eye on whether there could be longer-term supply bottlenecks following the pandemic and Brexit.

The BoE saw inflation fractionally below its 2% target in two and three years’ time, based on expectations in financial markets for Bank Rate of 0.3% in two years’ time and 0.6% by the second quarter of 2024.

Bailey said the BoE was not sending a signal about the likely path of interest rates.

($1 = 0.7206 pounds)

(Reporting by UK bureau; Editing by William Schomberg, Toby Chopra and Hugh Lawson)

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