Canada’s main stock index edged lower Monday as gains in Veresen, which is being acquired by competitor Pembina Pipeline, were offset by continued losses in Home Capital Group Inc. shares.
The Toronto Stock Exchange’s S&P/TSX composite index was down a modest 10.50 points to 15,575.63.
Veresen shares soared by about 19% at the close, adding $2.90 to $18.13, after it reported it was being taken over by Pembina in a friendly deal worth $9.7 billion.
“That’s provided some optimism on a day when crude oil prices are down a little bit and there would otherwise be some pressure on the energy space,” said Craig Fehr, a Canadian markets strategist at Edward Jones in St. Louis.
On the opposite side of the ledger was Home Capital Group Inc., whose stock sank by 13.43%, losing $1.08 to $6.96, after it said it expects to draw $1 billion from its $2 billion line of credit provided by the Healthcare of Ontario Pension Plan.
The Toronto-based mortgage lender has seen its stock price tumble over the last several days following allegations from Ontario’s securities watchdog that it misled investors. Home Capital has said the allegations are without merit and committed to defend itself against them.
Equitable Group Inc., a main competitor of Home Capital, was up nearly 30% at Monday’s close, gaining $10.86 at $47.35, after it arranged up to $2 billion in standby credit from a syndicate of Canadian banks.
“If you look at the TSX, it’s kind of a mix of positives and negatives today,” Fehr said.
In New York, markets were also relatively flat after U.S. Congress agreed to a deal that will keep the government operating for the rest of the fiscal year.
“The news over the weekend that they were able to avert the looming shutdown was certainly good news but I don’t know if it was enough to get the market to rally,” Fehr said.
“I think the much bigger policy changes that are on deck are certainly getting much more of the attention, be it tax reform or the potential for infrastructure spending.”
The Dow Jones industrial average lost 27.05 points to 20,913.46, while the S&P 500 index added 4.13 points to 2,388.33. The Nasdaq composite index was up 43.99 points to 6,091.60, a record high.
The daily average for the Canadian dollar was US73.21¢ US, up 0.01 of a cent from Friday.
In commodities, the June crude contract lost US49¢ at US$48.84 per barrel, the June natural gas contract gave back US6¢ at US$3.22 per mmBTU and June gold retreated US$12.80 to US$1,255.50 an ounce. July copper was up US5¢ at US$2.66 a pound.