Indian envoy warns of 'big red line,' days after charges laid in Nijjar case
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
Strong quarterly results powered the energy and materials sectors higher, helping Canada's main stock index to rebound from its lowest level in three months.
Energy was the leading sector Wednesday, climbing more than three per cent and outpacing crude oil prices, as shares of Cenovus Energy Inc. surged 10.3 per cent after the Calgary producer tripled its dividend and reported a first-quarter profit of $1.6 billion.
“Certainly Cenovus put up a really strong quarter last night and had a very good dividend bump which is really something I think we expect to see from a lot of the energy companies as they report in the next few weeks,” said Greg Taylor, chief investment officer of Purpose Investments.
The June crude contract was up 32 cents at US$102.02 per barrel and the June natural gas contract was up 36.1 cents at US$7.34 per mmBTU.
Taylor said as long as crude remains above US$100, producers are going to be “cash flow machines” with management preferring to return cash to shareholders than do an acquisition or build new projects.
Natural gas prices rose following Russia's decision to cut supply to Poland and Bulgaria.
“I think natural gas is definitely outperforming because we're starting to realize that western Europe is going to be in for a few years of pain on the natural gas side as they're trying to find new sources of natural gas instead of Russia.”
Taylor said it's unfortunate Canada doesn't have any liquid natural gas (LNG) for export, but Canadian producers could sell more to the U.S. to offset its LNG exports to Europe.
The Canadian dollar traded for 77.95 cents US compared with 78.14 cents US on Tuesday.
Record quarterly profits from Teck Resources Ltd. boosted the company's shares 11.7 per cent, helping to drive materials higher despite a dip in gold prices.
The June gold contract was down US$15.40 at US$1,888.70 an ounce and the July copper contract was up 1.1 cents at US$4.48 a pound.
The Vancouver-based mining company said its first quarter profits soared to $1.57 billion and revenues nearly doubled to $5.03 billion as demand for its copper, zinc and steelmaking coal surged.
Five of the 11 major sectors on the S&P/TSX composite index were up on the day. That propelled the TSX to close up 53.42 points to 20,744.23 for its first positive day in six sessions.
In New York, the Dow Jones industrial average was up 61.75 points at 33,301.93. The S&P 500 index was up 8.76 points at 4,183.96, while the Nasdaq composite was down 1.81 points at 12,488.93.
Taylor said investors will take a positive to flat day for markets as a win after the big selloff of the last few days.
“I think people are looking for more signs of relief and it's really going to be all about these earnings to see if we can get any positive signals and then we can hope to build off of that with some more gains.”
The tech-heavy Nasdaq sank to a 52-week low of 12,430.90 as some positive earnings results from Microsoft were offset by Google parent Alphabet, whose shares fell more than three per cent after missing analyst forecasts.
Facebook reported after markets closed Wednesday with Amazon and Apple reporting Thursday.
Taylor said these tech stocks could set the tone for the sector.
“Maybe if we can get some good numbers out of these remaining tech companies there could be a time to have a little more of a bounce into month end and maybe into May.”
Canada's tech sector slumped at the close as Shopify Inc. lost 2.8 per cent.
Taylor said the Ottawa-based e-commerce firm is in a precarious situation as investors are in a risk-off mode and looking for value.
The heavyweight financials sector was a laggard on the day, losing ground as the big banks were down, including Bank of Nova Scotia and Laurentian Bank off 1.8 and 1.7 per cent, respectively.
“There's a lot of fear that with some of these big moves in the bond yields and commodities you're going to get some sort of financial crisis and that's one thing that would hurt the banks and I think that's causing people to just be a little more cautious on their bank holdings.”
This report by The Canadian Press was first published April 27, 2022.
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
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