Canadian Stocks Make It Four Days of Gains on Some Strong Earnings, Bargain Buying; Canada Mkts Closed Monday For Civic Holiday
Canada's main stock market, the Toronto Stock Exchange, made it four days of gains in a row Friday on some positive earnings from the likes of Encana (ECA.TO) and TransCanada (TRP.TO) and on a continuation of bargain buying as the index steadies again after a bout of serious selling pressure over recent weeks.
But while the TSX closed up 85 points - helped by a strong late rally - it was up nearly 120 points in early afternoon trade. Gains were probably capped amid uncertainty about the timing on U.S. interest rates after the release of poor economic data there this morning probably ruled out a rate rise for September. Moreover, concerns about another monthly drop in Canada GDP data has revived talk about another interest rate cut here. Added to all of that are uncertainties about the health of the China economy.
And there were disappointing earnings reports too from the likes of Imperial Oil (IMO.TO) while many investors were on the sidelines ahead of what is a long weekend in Canada, with markets closed Monday for a Civic holiday.
Among commodities, the Gold December contract recouped early Friday losses and closed up 0.7% today at near US$1,096.40/t oz. But gold was down 6.5% in July, marking its biggest monthly drop in two years. The reversal today probably reflected the release of disappointing employment cost index data in the United States, which is seen keeping the Fed on hold with rates beyond September at least. But a rates rise in the U.S. is likely coming, hence the strength of late in the USD and weakness in gold.
Meanwhile, September NYMEX crude fell 3% today to under US$47 a barrel as data showed the number of U.S. oil rigs rose marginally last week.
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