The Toronto stock market held to a small gain Monday, bucking a trend that saw a big sell-off in New York following the collapse of debt talks with Greece on the weekend and weaker than expected manufacturing data.
The S&P/TSX composite index closed up 14.90 points at 14,756.05, while the Canadian dollar lost 0.04 of a U.S. cent to close at 81.19 cents.
In New York, markets were solidly lower for a second consecutive session following a big pullback Friday that had also been sparked by worries over a possible debt default by Greece and its affect on the euro and the world economy.
The Dow Jones industrial average lost 107.67 points to 17,791.17, the Nasdaq was down 21.13 points at 5,029.97 and the S&P 500 declined 9.68 points to 2,084.43.
Optimism over the Greek debt crisis turned sour last Thursday after the International Monetary Fund walked away from the talks, citing lack of progress.
New talks were arranged for the weekend with hopes than the outline of a deal could emerge in time for a meeting of the 19 eurozone finance ministers in Luxembourg on Thursday. Those expectations are now fading.
The current bailout program runs out at the end of the month and Athens needs to pay some 1.6 billion euros to the IMF or risk a default. The talks centre on freeing up 7.2 billion euros in bailout money, but Athens and its creditors remain far apart on austerity measure Greece needs to impose to put its financial house in order.
Meanwhile, a U.S. manufacturing survey showed disappointing results. The index dropped to negative 2.0 in June.
A Canadian manufacturing survey was also weaker than expected. Statistics Canada said factory sales contracted 2.1 per cent in April – a result about four times lower than economists had predicted and the third time in the first four months of the year that manufacturing sales fell.
Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, said many traders are awaiting news from the U.S. Federal Reserve on Wednesday regarding the timing of an interest rate hike. That, combined with the uncertainty around Greece’s debt woes, has left the Toronto stock market trading within a narrow range, Nakamoto said.
“I think there’s enough confusion out there to get people to sit on the sidelines,” he said.
“It seems to me that we’re trading in a range here until there’s more clarity in terms of what the Federal Reserve is going to do, what’s going to happen with Greece. We’re sort of a sideshow, in a way.”
On the commodity markets, the August gold contract rose $6.60 to US$1,185.80 an ounce while the July crude contract was down 44 cents at US$59.52 a barrel.
Shares of Hudson’s Bay Company (TSX:HBC) gained more than seven per cent to close at $25.78 after announcing a $3.9-billion deal to purchase German department store chain Galeria Kaufhof.