TSX closes higher amid less geopolitical risk, positive Chinese data
Malcolm Morrison, The Canadian Press
Published Monday, August 11, 2014 7:11AM EDT
Last Updated Monday, August 11, 2014 4:50PM EDT
TORONTO -- The Toronto stock market closed higher amid an easing of tensions in the conflict between Ukraine and Russia and reassuring inflation data from China.
The S&P/TSX composite index ran up 65.33 points to 15,261.64.
The Canadian dollar was ahead 0.43 of a cent to 91.58 cents US.
U.S. indexes were also positive as traders felt more inclined to take on risk, following reports Friday that Russia called an end to military exercises near Ukraine and withdrew troops to their bases.
"We're seeing a little bit of that risk abate and I would caution investors about getting too complacent on one side or the other when it comes to geopolitical tensions," said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis.
"In the very near term, it's going to remain a headline risk for the market for the foreseeable future," Fehr said.
But gains started to deteriorate late in Monday morning after the Ukraine government announced that the Red Cross will lead an international humanitarian aid operation into Ukraine's conflict-stricken province of Luhansk with assistance from Russia, the European Union and the United States.
Such initiatives have previously faced sustained opposition from Ukraine and the West, who had feared they could act as a pretext for sending Russian troops into rebel-held territory.
The Dow Jones industrials was well off the highs of the day but still up 16.05 points to 16,569.98, the Nasdaq climbed 30.43 points to 4,401.33 while the S&P 500 index was ahead 5.33 points to 1,936.92.
Meanwhile, China's consumer price index in July stayed at 2.3 per cent, well below the official target for the year of 3.5 per cent. That gives the central bank room to ease access to credit if needed to shore up economic growth, which was 7.5 per cent in the latest quarter.
TSX leadership came from the financial sector, ahead 0.57 per cent with investors unfazed by a move by ratings agency Standard & Poor's on Friday to revise its outlooks to negative from stable on almost all Canadian banks. It comes a week after Ottawa launched a public consultation on its proposed "bail-in regime," which seeks to protect taxpayers from having to foot the bill for bailing out a big bank in the event that it runs into financial trouble.
Industrials were up 0.75 per cent.
The base metals was well off session highs, closing flat as the positive news from China failed to lift metal prices, with September copper unchanged at US$3.17 a pound.
The gold sector edged up 0.27 per cent as increased appetite for risk pushed December gold down 50 cents to US$1,310.50 an ounce.
The energy sector was slightly higher while September crude on the New York Mercantile Exchange gained 43 cents to US$98.08 a barrel.
Shares of Tekmira Pharmaceuticals Corp. (TSX:TKM) continued to charge ahead following a U.S. regulatory decision that relaxes safety precautions on the Vancouver-based company's experimental drug for treating Ebola. Its stock surged $2.84 or 12.35 per cent to $25.84, after jumping 47 per cent on Friday. Tekmira has a $140-million contract from the U.S. government to develop its drug TKM-Ebola, but last month a small human trial of the experimental drug was put on hold after safety issues emerged.