The S&P/TSX Composite Index has the best streak of the year despite the decline of big names in technology

0

TORONTO — Canada’s main stock index closed higher for a fourth straight day despite a sharp decline in Shopify Inc. and the tech sector.

The S&P/TSX Composite Index closed up 42.44 points at 21,362.36 for a gain of 818 points or 4% since Friday.

US markets were also higher on Wednesday with the Dow Jones industrial average up 224.09 points to 35,629.33. The S&P 500 index rose 42.84 points to 4,589.38, while the Nasdaq composite rose 71.55 points to 14,417.55.

Despite the gains, the volatility that has been a strength over the past two months has continued, particularly in the technology sector.

“A lot of growing software and payments names are being hit hard,” said Mike Archibald, vice president and portfolio manager at AGF Investments Inc.

Ottawa-based Shopify ended the day down 10%, while Dye & Durham Ltd. fell 14.5%. Lightspeed Commerce Inc. lost 7.3%.

US economic data was also weak, with ADP employment figures showing a loss of 301,000 jobs for January.

Archibald said some U.S. Federal Reserve speakers warned January payrolls numbers could also be weak on Friday due to the Omicron variant of COVID-19.

“You can see a weaker US dollar and potentially some of the commodities continue to do well if the number is really weak.”

The US greenback was relatively stable against the loonie, but weaker against other currencies as several Fed speakers tried to steer the market away from Chairman Jerome Powell’s speech last week.

“You’ve had several, basically taking the 50 basis point hike off the table for March and trying to recalibrate the market, I think, to a lower rate of hikes for 2022,” Archibald said.

The Canadian dollar was trading at 78.88 cents US versus 78.78 cents US on Tuesday.

Nine of the TSX’s 11 major sectors were up, led by consumer staples with shares of Loblaw Cos. ltd. up 3.5%.

The heavyweight in the financial services sector was propelled higher by the gains of Canada’s largest banks, with Bank of Montreal, Toronto-Dominion Bank and CIBC rising 1.9, 16 and 1.2 respectively. %.

Energy was also stronger as crude oil prices continued to rise amid falling US inventories and confirmation from OPEC and its allies that production will increase by 400,000 barrels per day in March as planned.

The March crude contract rose 6 cents to US$88.26 a barrel after hitting an intraday high of US$89.72, while the March natural gas contract rose 75 cents to 5 US$.50 per mmBTU.

Birchcliff Energy Ltd. increased by 5.5%.

Crude prices continue to be extremely resilient, helping energy producers generate huge free cash flow that helps stock prices stay cheap, Archibald said.

“There continues to be overwhelming interest in energy names, even on days when they are down. The corrections are very superficial. A few days and then buyers pull back quite aggressively,” he said.

“To me, that indicates that there is still a lot of market demand for these stocks, and so I think as we continue to see these companies report very strong numbers, which we should for the next two quarters, I think they will continue to be demanded by the market.

Metal prices are also supporting the materials sector. The April gold contract rose US$8.80 to US$1,810.30 per ounce and the March copper contract rose 6.2 cents to US$4.50 per pound.

This report from The Canadian Press was first published on February 2, 2022.

Companies in this story: (TSX:SHOP, TSX:DND, TSX:LSPD, TSX:BIR, TSX:BMO, TSX:TD, TSX:CM, TSX:GSPTSE, TSX:CADUSD=X)

JOIN THE CONVERSATION

Conversations are the opinions of our readers and are subject to the Code of Conduct. The Star does not share these opinions.
Share.

Comments are closed.