TSX gains as metals, energy stocks surge on positive news from China and OPEC
This is a file image of various stocks.
TORONTO -- Soaring metal and energy shares helped push Canada's main stock index higher Tuesday as commodity prices rose on global positive sentiment from China and OPEC.
In Toronto, the S&P/TSX composite index was up 73.68 points to 15,202.37. The metals sector was the leading advancer, climbing nearly five per cent as the September copper contract gained 11 cents to US$2.85 a pound, hitting a five-month high.
Metal prices were being supported on signs that China's GDP is expected to grow in the second half of the year, said Noman Ali, a portfolio manager at Manulife Asset Management.
Prices were also bolstered after American construction and mining equipment maker Caterpillar reported better-than-expected earnings results and raised its forecast for revenue and profit for the full year, citing increased demand across many of its markets including China.
"The company had good things to say about China," Ali said.
In the currency market, the Canadian dollar was trading at an average price of 79.96 cents US, up. 0.04 of a U.S. cent.
In New York, markets were back on their winning streak amid a heavy week of corporate earnings releases. The Dow Jones industrial average climbed 100.26 points to 21,613.43. The S&P 500 index gained 7.22 points to 2,477.13 and the Nasdaq composite edged up 1.36 points to 6,412.17, both eclipsing record highs.
The U.S. Federal Reserve's policymaking committee kicked off a two-day meeting, following its decision last month to raise short-term interest rates for the third time since December.
The central bank also announced plans to start gradually paring its bond holdings later this year, a move that could cause rates to rise. Most investors expect the Fed to hold rates steady at this week's meeting and possibly raise them one more time this year.
"Although the probability of a hike is pretty low, we would still be interested in the balance sheet and the comments around the balance sheet and shrinkage," said Ali.
In commodities, the September crude contract was up $1.55 to US$47.89 per barrel amid news that the world's largest oil producer, Saudi Arabia, vowed to cut exports next month.
The Organization of the Petroleum Exporting Countries and several non-OPEC producers like Russia decided last year to rein in output, but prices have fallen below US$50 a barrel in recent weeks amid concerns about higher production in the U.S. and some countries' lack of discipline in enforcing the cuts.
The International Energy Agency has estimated that compliance with the OPEC output cut fell to 78 per cent in June, from 95 per cent the previous month.
Beyond high U.S. output, oil prices have also been pressured by production increases in OPEC members Libya and Nigeria, which have exemptions from the cuts due to political instability.
Elsewhere in commodities, the September natural gas contract advanced five cents to US$2.93 per mmBTU and the August gold contract was down $2.20 to US$1,252.10 an ounce.
With files from The Associated Press