Canada’s main stock index closed up Thursday for a tenth straight day of gains as the TSX once again outperformed its U.S. counterparts.
The improved performance of the TSX, which is up about 500 points in the stretch, comes as energy stocks gain ground, said Candice Bangsund, vice president and a portfolio manager at Fiera Capital Corp.
“Today’s really revolving around the energy story across the board. So energy outperformance both in Canada and the U.S.”
The delayed rise in energy stocks is helping the Canadian market outperform U.S. indices since energy stocks make up about 25% of the market, said Bangsund.
“After lagging quite substantially the underlying crude prices for the last year, energy stocks or companies are finally playing catch-up here in the second quarter, which has obviously been inherently positive for the Canadian equity market and helped to close that performance gap, and that’s really what we’re seeing here again today, TSX outperformance versus its peers in the U.S.”
The Toronto Stock Exchange’s S&P/TSX composite index closed up 35.49 points at 16,143.55. The S&P/TSX capped energy index was up 2.12%.
The recent boost of the TSX comes as the headwinds of the past year including the discount to Western Canadian production and trade fears ease, said Bangsund.
“When it comes to the Canadian market, I think about the last year, and sentiments towards Canadian stocks was extremely pessimistic. There were a number of significant headwinds that were lingering over the market … when you remove these two headwinds they’re now sort of translating into tailwinds in the TSX and lending support there.”
In New York, the Dow Jones industrial average closed down 54.95 points at 24,713.98. The S&P 500 index ended down 2.33 points at 2,720.13 and the Nasdaq composite index was down 15.83 points at 7,382.47.
The Canadian dollar averaged US78.12¢, up 0.05 of a U.S. cent.
Both the Canadian dollar and equities shrugged off the passing of a soft deadline to have a NAFTA deal resolved, said Bangsund.
“Both the Canadian equity market and Canadian dollar are really unphased by the fact that there’s really no news today. It was a soft deadline to begin with.”
The June crude contract closed unchanged at US$71.49 per barrel and the June natural gas contract was up US4¢ at US$2.86 per mmBTU.
The June gold contract ended down US$2.10 at US$1,289.40 an ounce and the July copper contract was up US2¢ at US$3.09 a pound.
Enbridge Inc. closed up 39¢ or 0.93% to $42.19 after announcing an $11.4 billion corporate restructuring.
Nutrien Ltd. closed down 17¢ or 0.26% to $66.01 after selling a $5.2 billion stake in a Chilean lithium producer.