Canada's main stock market in Toronto moved higher on Tuesday as gains driven by resources shares overpowered the slump from non-resources losers.
After a big rally in the previous day, the Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index added 95.06 points, or 0.7 percent, to 13,647.26 points. Healthcare shed 3.3 percent as its heavyweight Concordia Healthcare Corp. lost 6.5 percent to 51.48 Canadian dollars (about 39.52 U.S. dollars). Utilities also tumbled 2.16 percent as the gas and electricity distributor Fortis Inc. dropped 2.27 percent to 37.43 Canadian dollars per share.
However, the losses were wiped off by the rally in resources share with the mining sector leading the increase by 7.64 percent. Both precious and basic metals were in the positive territory. S&P/TSX Global Gold Index, a leading benchmark of global gold portfolios, rose for a third straight day, up 2.72 percent to 136. 10 points, as most of the Canadian gold shares climbed higher.
Barrick Gold Corp. was up 6.14 percent to 9.51 Canadian dollars, while Yamana Gold Inc. jumped 8.88 percent to 2.82 Canadian dollars. The basic metals giant First Quantum Minerals Ltd. was the biggest gainer by percent. Its stock price spiked 21 percent to 7. 49 Canadian dollars after the Vancouver-based company announced on Monday after the closing bell that it had revised its deal with Franco-Nevada Corp for its flagship copper-gold Cobre Panama project in Central America.
Franco-Nevada will have to pay an initial contribution of 330 million to 340 million U.S. dollars to First Quantum in October. Another resource share energy advanced 3.76 percent as the oil and gas company Encana increased 6.96 percent to 10.60 Canadian dollars.
Gainers included the most weighed sector financials, higher 0. 86 percent as well. Although the rally in recent commodities prices helped push up the TSX index, the International Monetary Fund has downgraded its outlook for Canadian growth to 1 percent this year in a report on Tuesday, due to the impact of lower oil and commodities prices.
Besides, on the domestic economic beat, Statistics Canada reported on Tuesday that Canada's exports declined 3.6 percent in August, while imports edged up 0.2 percent, and Canada's merchandise trade deficit with the world widened from 817 million Canadian dollars in July to 2.5 billion Canadian dollars in August.
"The pullback in exports during the month was driven in large part by lower commodity prices, particularly the sharp drop in oil prices," Dina Ignjatovic, an economist from TD Bank, wrote in a note on Tuesday. However, given the strength in exports recorded during the previous two months, the Canadian economy is still tracking growth of around 2.5 percent for the third quarter this year.
On the currency front, the Canadian dollar on Tuesday climbed to 0.7676 U.S. dollar in the afternoon trading, when compared with 0.7641 U.S. dollar on Monday.
Latest comments