Canada’s main stock index capped a good week with the energy sector closing higher Friday as investors responded positively to federal action to kick-start construction of the Trans Mountain pipeline expansion.
Ottawa ordered the National Energy Board to redo its environmental review of the controversial project, this time taking into account the impact of additional oil tanker traffic off the coast of British Columbia.
The move came less than a month after The Federal Court of Appeal quashed the approval the NEB and the cabinet gave the project in 2016, citing improper consultation with Indigenous communities and a lack of review of the marine shipping issue.
“Any sort of movement on pipelines is viewed to be somewhat positive so we’re seeing a little boost on that side,” said Jamie Robertson, senior portfolio manager at Manulife Asset Management.
The November crude contract was up US46¢ US to US$70.78 per barrel on the day. It gained 2.6% for the week and closed at a 10-week high.
The S&P/TSX composite index was up 9.38 points to close at 16,224.13, after reaching a high of 16,267.69 on 463.6 million shares traded.
The TSX was up 1.3% on the week while the loonie improved. On Friday, the Canadian dollar traded at an average of US77.42¢ compared with an average of US77.48¢ on Thursday.
“It just feels like some of the tension around trade and tariffs has quieted down a little bit so the market is cheering that a little bit,” Robertson said in an interview
AltaGas Ltd. was the day’s biggest gainer, rising 5.87%, while Prometic Life Sciences Inc. led on the downside, falling 7.41%.
Overall, base metals led, rising 1.36%, while the health-care sector dropped 2.31% led by Prometic and cannabis companies. Canopy Rivers Inc., the venture capital arm of the marijuana company Canopy Growth, closed down 11.4% to $7.75, after gaining 150% Thursday on its first day of trading on the TSX Venture exchange.
Tilray Inc. closed down 30.25% to US$123 on the Nasdaq, two days after it went on a wild ride by surging more than 90%, dropping into negative territory and rebounding after the licensed producer said it got approval to export medical cannabis from Canada to the U.S. for a clinical trial.
In New York, the Dow Jones industrial average hit a new high, gaining 86.52 points to 26,743.50. The S&P 500 index lost 1.08 points to 2,929.67, while the Nasdaq composite was down 41.28 points to 7,986.95.
The economic data is supportive of strong earnings in the U.S. and Federal Reserve policy clearly indicates that rates will continue to rise, Robertson added.
“The overall sentiment remains to be very constructive.”
The November natural gas contract was up US1¢ at US$2.97 per mmBTU.
The December gold contract was down US$10 at US$1,201.30 an ounce and the December copper contract was up US11.75¢ at US$2.86 a pound.