Higher energy stocks helped lift Canada’s main stock index Monday amid signals that the Organization of Petroleum Exporting Countries could extend a cap on oil production among its members.
The Toronto Stock Exchange’s S&P/TSX composite index added 70.04 points to 15,652.08, with stocks in health care, metals and consumer staples the lone decliners.
Much of the gain came as optimism grew that OPEC will continue its cap on production. Its 14 members, including Saudi Arabia, have cut output by 1.2 million barrels a day since January as part of a concerted effort to boost oil prices.
Eleven other non-OPEC oil-producing countries have also promised to trim an additional 558,000 barrels a day.
Emerging signs that OPEC plans on extending its agreement past its original six-month period can only be read as positive, said Craig Fehr, a Canadian markets strategist.
“If you are of the mindset or the impetus that you want oil prices to move higher, then you are hopeful that this second round of agreements can perhaps do what the first round wasn’t fully effective in doing,” said Fehr, who works at Edward Jones in St. Louis.
“There is some sense of optimism here. Any time OPEC is involved in the conversation, I don’t think it should be dismissed. Their impact and influence on global oil prices has diminished today relative to a decade or so ago … but at the same time, any changes in OPEC production should not be ignored.”
The group is set to officially discuss a possible deal later this month.
The June crude contract was up US21¢ at US$46.43 per barrel, while the Canadian dollar, which often trades in tandem with oil prices, rose 0.04 a US cent to an average value of US72.97¢.
In corporate news, shares of Home Capital Group Inc. were on a roller-coaster ride for most of the day after the company suspended its dividend and announced three new board members. Its shares closed up 16.75%, or 98¢, to $6.83 on the Toronto Stock Exchange after climbing as high as $6.88 and falling to as low as $5.06 in earlier trading.
On Wall Street, the Dow Jones industrial average was ahead 5.34 points to 21,012.28 while the Nasdaq composite index saw an uptick of 1.9 points to 6,102.66 to land at a new record. The S&P 500 index was barely changed, up 0.09 of a point to 2,399.38, hitting a record level for the second session in a row.
In other commodities, the June natural gas contract was down US9¢ at US$3.17 per mmBTU, the June gold contract was up US20¢ at US$1,227.10 an ounce, and the July copper contract pulled back US4¢ at US$2.49 a pound.