Canada's benchmark TSX index edges up on oil gains and local acquisitions
Canada's benchmark stock index edged up slightly on Monday, as calm returned to the market after a turbulent week. However, rising tensions in Middle East and the upcoming U.S. data this week kept investors on the edge.
The S&P/TSX Composite Index closed at 22,406.31, up 95.01, or 0.43%. Two major acquisitions in Canada also contributed to the increase.
On Monday, oil prices surged to $80.06 per barrel amid fears that tensions in the Middle East may escalate and lead to a wider conflict. This could also impede crude oil supply globally.
The energy stocks index rose by roughly 3%. This was boosted further by Canada's largest gas driller Tourmaline Oil Corp.'s C$1.3billion ($945.87m) offer to purchase smaller rival Crew Energy.
The S&P/TSX Composite Index is dominated by the energy index, which accounts for almost 18% of its total weight.
Barry Schwartz is the chief investment officer of Baskin Wealth Management. He said, "The Canadian markets welcomes the uncertainty in the Middle East regarding oil stocks."
"Of Course, the World Doesn't Want to See Any of That," he said, underlining why investors were on edge.
The materials sector in Canada also saw gains. Osisko Mining, a Canadian miner that was acquired by Gold Fields Ltd of South Africa for C$2,16 billion ($1,57 billion), jumped 63% to the top spot on the TSX.
Barrick Gold's shares rose 9.4% after the gold miner exceeded Wall Street expectations for its second-quarter profits, contributing to the sector’s growth. Gold and copper prices also boosted the shares of other miners.
Investors are cautious as they await a number of economic reports in the United States, including Wednesday's consumer price index. This will be used to gauge the Federal Reserve’s stance regarding its monetary policies.
Allan Small is a senior investment advisor at Allan Small Financial Group, iA Private Wealth.
"But we also don't want strong data that would show persistent inflation."
The U.S. Retail Sales data is expected to be released on Friday.
The markets are expecting an interest rate reduction at the September meeting of the U.S. Central Bank. (1 Canadian dollar = $1) (Reporting and editing by Shreya Biwas and Jonathan Oatis; reporting by Promit Mukherjee and Nikhil Singh in Bengaluru)
(source: Reuters)
