TSX Declines on Higher Oil

The S&P/TSX Composite Index fell nearly 0.5% to trade below 36,000 on Friday as oil prices moved higher, with supply concerns persisting despite reports that Saudi Arabia was offering additional crude supplies through Oman. US President Trump noted the possibility that the US could re-escalate attacks against Iran after recent attempts at dialogue between Tehran, Washington, and GCC states failed to restore maritime oil exports. Canadian bond yields edged higher amid persistent energy-driven inflation concerns, pressuring credit-sensitive stocks. RBC and Manulife fell about 0.5%, while Great-West Lifeco shed 1%. Miners posted losses after closing sharply higher on Thursday, despite gold prices edging higher. Agnico Eagle and Barrick lost about 1% each, while Franco-Nevada and WPM fell more than 0.5%. In contrast, technology stocks were mostly higher, with Celestica up more than 2% and Shopify inching higher amid strength in Wall Street chipmakers.

Futures tracking the TSX edged lower on Friday as oil prices inched higher, with supply concerns persisting despite reports that Saudi Arabia was offering additional crude supplies through Oman. US President Trump noted the possibility that the US could re-escalate attacks against Iran after recent attempts at dialogue between Tehran, Washington, and GCC states failed to restore maritime oil exports. Canadian bond yields edged higher amid persistent energy-driven inflation concerns, pressuring credit-sensitive stocks. Meanwhile, gold prices remained firm, lending support to mining shares. The S&P/TSX Composite Index is heading for a weekly decline as the oil rally lost momentum this week and markets had already priced in the US Fed’s 25 bps rate hike.

The S&P/TSX Composite Index rose nearly 1% to trade close to 36,000 on Thursday as gold prices jumped, lending support to mining stocks. Gold rebounded as the recent rally in oil prices lost steam, limiting the surge in bond yields. The moves followed reports that Saudi Arabia aims to restore around half of its East-West pipeline capacity within days and return it to full operation within six weeks. Agnico Eagle, Barrick and WPM rising about 2%. The pause in the oil rally also supported credit-sensitive stocks, as easing inflationary pressures helped lower bond yields. Major banks traded above the flatline, with CIBC and National Bank up around 0.5%. Meanwhile, the US Federal Reserve raised interest rates, while FOMC members projected in their Summary of Economic Projections that another rate hike could be warranted this year. Fed Chair Kevin Warsh said inflation remains elevated, while data released last week showed that core US inflation rose more than anticipated in August.