Update: TSX Little Changed on Mixed Commodity Prices
Canada's main stock market calmed a bit on Tuesday, ending little changed after a flurry of action on reports North Korea might be willing to talk, and as many took more of a wait-and-see on the tariff issues. The S&P/TSX Composite Index was up 3 points or 0.03% to close at 15,545.
The news about North Korea saw global equities rally more than 1% and the surge in risk appetite weighed on bonds. But the euphoria wore off quickly and a turn-around on Wall Street, where the better than 100-point gain on the Dow dropped to around 9 points and also eroded global equities.
The TSX ranged from 15,503 to 15,590. The sectors were mixed, with materials and consumer staples leading the upside, while industrials and energy were laggards. Gold surged 1.2% higher and climbed to more than $1,335 from a low of $1,320.80. Crude oil, on the other hand, was little changed at $62.60 per barrel.
In stock news, heavily traded Bombardier (BBD-B.TO) shares fell 6% after the plane and train maker went to the market for a bought deal financing. Cannabis stock were stronger, including Aurora Cannabis (ACB.TO, +4%) and Canopy Growth (WEED.TO, +2%).
In economic news, Canada's Ivey PMI improvement to 59.6 in February from 55.2 in January, contrasting with the modest declines seen in the CFIB's Business Barometer and the RBC manufacturing PMI in February. However, the latter two indicators were elevated in February despite mild erosion from January levels. The CFIB's Business Barometer dipped to 62.4 in February from 62.7 in January, maintaining an elevated level relative to the 57.2 to 59.8 readings seen (monthly) from August to December of 2017. The RBC manufacturing PMI dipped to 56.6 in February, but from 55.9 in January the was the best reading since the matching 55.9 in April. These indicators, while not the most reliable guides to underlying activity in Canada's economy, do benefit from being the most timely. Hence, the resilience in all three measures during February is suggestive of resilience in Canada's economy during Q1, despite gathering headwinds (trade, housing.) U.S. growth remains, of course, a strong tailwind. The Bank of Canada's latest interest rate announcement will be released on Wednesday, but no change to the 1.25% rate is expected.
The Canadian dollar gained more than third of a cent to 77.58 US.
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