S & P / TSX composite rebounds as oil prices rise, while gold shines

TORONTO – The main Canadian stock index rebounded as higher crude oil prices boosted the energy sector while a hawkish tone from the US Fed made gold shine.

The S & P / TSX Composite Index closed 32.54 points higher at 21,072.20.

In New York, the Dow Jones Industrial Average lost 170.64 points to 36,236.47. The S&P 500 Index lost 4.53 points to 4,696.05, while the Nasdaq Composite lost 19.30 points to 15,080.87.

Energy was the strongest sector on the TSX, rising 3%, with Vermilion Energy Inc. surging 9.2% as crude oil briefly exceeded US $ 80 per barrel for the first time in just a bit. more than seven weeks.

While an underinvestment supply has kept production in check, demand is picking up as the global economy normalizes despite lockdowns from COVID-10, said Anish Chopra, managing director of Portfolio Management Corp.

“You’re at this inflection point where people realize that it’s going to take years to recoup some of that supply of oil, of energy, but the demand is there, so the price of oil is responding to that.” , he said in an interview.

The savings in gasoline prices for the holidays are also dissipating due to short-term pressures such as unrest in Kazakhstan and production disruptions in Libya.

The February crude contract rose US $ 1.61 to US $ 79.46 per barrel and the February natural gas contract fell seven cents to US $ 3.81 per mmBTU.

The Canadian dollar was trading at 78.49 US cents against 78.63 US cents on Wednesday.

Financials were helped by the minutes of the December Fed meeting, at which members supported an early withdrawal of stimulus and a hike in interest rates.

Canadian bank stocks appreciated as 10-year bond yields exceeded 1.7% on both sides of the border. The Canadian Western Bank rose 4.6 percent, Laurentian Bank 2.3 percent and CIBC 2.1 percent.

The tone of the US central bank was not good for the tech and materials sectors, both of which lost ground.

Materials were down 2.7%, in part because of Stelco Holdings Inc.’s stock plunge 10.3% after the Hamilton steelmaker said shipments would be lower than forecast in the fourth quarter.

Pressure on the sector also came from falling gold prices as central banks prepared to fight inflation.

The February gold contract was down US $ 35.90 to US $ 1,789.20 per ounce and the March copper contract was down 5.9 cents to US $ 4.35 per ounce. delivered.

“Gold tends to be an inflation hedge among some of its other uses, so higher interest rates to offset inflation are not as good for gold,” Chopra said.

Technology fell 1.2%, with Shopify Inc. suffering a third straight day of losses, down 1.7% on Thursday.

“For technology, they’ve certainly been the story of the past two years during COVID and their ratings reflect that. So seeing their valuations starting from fairly high levels is reasonable. “

This report by The Canadian Press was first published on January 6, 2022.

Companies in this story: (TSX: SHOP, TSX: CWB, TSX: LB, TSX: CM, TSX: STLC, TSX: VET, TSX: GSPTSE, TSX: CADUSD = X)

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Felix J. Dixon