TSX Rises as Oil Dip Eases Inflation Worries

The S&P/TSX Composite Index rose nearly 1% to move above 36,000 on Monday as a dip in oil prices tempered inflation worries. Crude fell on hopes for US-Iran diplomatic efforts, and lower oil prices somewhat eased inflation concerns, with Canadian yields edging lower. Credit-sensitive sectors such as banks, pressured by inflation and higher interest rates, enjoyed respite: BMO, Scotiabank and CIBC each rose nearly 1%. Meanwhile, gold prices rose, supporting miners. Barrick (+5%) posted higher third-quarter profit as higher gold prices outweighed lower production. Franco-Nevada (+3%) is scheduled to report earnings on Wednesday. Elsewhere, Strathcona Resources (-0.5%) said on Sunday it would acquire Greenfire Resources (+38%) in a deal valued at about C$2.7 billion to C$2.9 billion, including debt. Power of Canada (+0.5%) is also due to report Q3 results on Wednesday.

Futures tracking Canadian equities rose on Monday after a dip in oil prices tempered inflation worries. Crude fell on hopes for US-Iran diplomatic efforts, and lower oil prices somewhat eased inflation concerns, with Canadian yields edging lower. Credit-sensitive sectors such as banks that have been pressured by inflation and higher interest rates enjoyed respite. Gold prices rose, supporting miners. Barrick posted higher third-quarter profit as higher gold prices outweighed lower production. Franco-Nevada is scheduled to report earnings on Wednesday. Elsewhere, Strathcona Resources said on Sunday it would acquire Greenfire Resources in a deal valued at about C$2.7 billion to C$2.9 billion, including debt, expanding its presence in Alberta’s oil sands. Power of Canada is also due to report Q3 results on Wednesday.

The S&P/TSX Composite Index rose 0.5% to close at 36,789 on Friday, recovering from earlier losses with support from mining shares. Democrats regained control of both chambers of Congress in the US, raising hopes of easing trade tensions, as a Democratic majority could constrain some of President Trump’s trade policy decisions. Meanwhile, Canada’s trade surplus widened to C$5.35 billion in September, as higher energy and gold exports to the US appeared to offset tariff impacts. Agnico Eagle added 2% and Franco-Nevada rose 2.2%, while WPM gained 3.2% after reporting record nine-month results on Thursday, with Q3 revenue soaring 62%. Broader sectors were mixed as investors assessed weaker-than-expected jobs data. Canadian employment fell by 4,700 in October, improving from September’s 68,300 decline but missing forecasts of a 13,600 increase. On the week, the index edged 0.1% lower.