TSX fails to get same lift as U.S. markets from easing of restrictions on Huawei
This is a file image of various stocks.
Ross Marowits, The Canadian Press
Published Tuesday, May 21, 2019 1:01AM EDT
Last Updated Tuesday, May 21, 2019 5:24PM EDT
TORONTO -- Canada's main stock index failed to match the stronger gains on U.S. markets after the Trump administration temporarily eased trade restrictions on Huawei Technologies.
The S&P/TSX composite index closed up 24.72 points to a high for the day of 16,426.47, a day after the Canadian market was closed for the Victoria Day holiday.
In New York, the Dow Jones industrial average was up 197.43 points at 25,877.33. The S&P 500 index was up 24.13 points at 2,864.36, while the Nasdaq composite was up 83.35 points at 7,785.72.
Shares of chipmakers like Intel got a boost from the U.S. government's move to issue a 90-day grace period on its order to restrict U.S. firms from selling to Chinese telecom gear maker Huawei, said Michael Currie, vice-president and investment adviser at TD Wealth.
U.S. markets ended last week lower, a step down from the previous week's steep drop following tweets from U.S. President Donald Trump about raising tariffs against China.
"If you're betting who's winning the trade war right now, the betting seems to be a little bit on the States," he said, pointing to the U.S. dollar reaching a four-week high and gold falling to a more than two week low.
The TSX was divided with six of the major sectors rising, led by telecommunications, energy and financials. Materials was the weakest on the day, falling nearly one percentage point. First Quantum Minerals Ltd. lost 7.17 per cent following a downgrade from Citigroup.
The June gold contract was down US$4.10 at US$1,273.20 an ounce and the July copper contract was down 1.1 cents at US$2.715 a pound.
The July crude contract was down eight cents at US$63.13 per barrel and the June natural gas contract was down six cents at US$2.61 per mmBTU.
Although oil prices were down, the spread on Canadian heavy crude hit the widest of the year at almost US$16.
The former NDP provincial government imposed production cuts on Jan. 1 to free up pipeline space and draw down a glut of oil that had resulted in widening differentials between bitumen-blend Western Canadian Select oil prices and U.S. benchmark West Texas Intermediate.
"It is fairly significant and a lot of that is just because we know they've eased some of their restrictions on production so it seems as the Canadian producers start producing more unfortunately the gap starts to get wider," Currie said in an interview.
The Canadian dollar traded at an average of 74.55 cents US compared with an average of 74.25 cents US on Friday.
Premium Brands Holdings Corp. rose $6.72 or 8.6 per cent to $84.80 after the Canada Pension Plan Investment Board signed a deal to invest about $200 million in the specialty food company.
U.S. markets are expected to be relatively calm on low trading for the remainder of the week heading into a long Memorial Day weekend with markets closed on Monday.