Canadian shares regained some ground today after yesterday's precipitous drop, with banks rebounding and rising oil prices helping energy stocks, and as investors watched developments on Greek debt negotiations.
The benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) rose 0.3 percent to 14,531.37 at 1 p.m. in Toronto. Two shares advanced for every issue that declined as eight out of ten share groups were in the positive territory.
Greece’s government has asked for a two-year bailout program from the European Stability Mechanism, covering all of the country’s financial needs along with a debt restructuring plan, according to a statement from the office of Prime Minister Alexis Tsipras. Greece has until 6 p.m. New York time to make a $1.7 billion payment to the International Monetary Fund as Europe’s funding program expires.
The energy sector, the main index's second most heavily weighted group, gained 0.8 percent as oil, Canada’s largest export, rose. Suncor Energy (TSE:SU), Canada's largest oil sands producer, picked up 2.1 percent to C$34.51. Enbridge (TSE:ENB), Canada's largest pipeline company, inched up 0.1 percent to C$58.04.
Cenovus Energy (TSE:CVE) fluctuated and was last down 0.1 percent at $19.78. Canada's second-largest independent oil producer agreed to sell its oil-and-gas royalty business for roughly C$3.3 billion to Ontario Teachers’ Pension Plan.
Pengrowth Energy (TSE:PGF) jumped 4.4 percent to C$3.12. The Calgary-based oil and gas producer plans to sell up to C$600 million in non-core assets by the end of the year.
Light, sweet crude for August delivery rose 1.1 percent to $58.93 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 89 1.4 percent to $62.90 a barrel on ICE Futures Europe.
The materials sub-index, which includes mining shares, added 0.4 percent even as gold prices dropped. Goldcorp (TSE:G), Canada’s largest gold miner by market value, tacked on 1 percent to C$20.48. Barrick Gold (TSE:ABX), the second-largest, ticked up 1 percent to C$13.51.
Spot gold fell one percent at $1,168.65 an ounce. It was trading $1,170.11, while U.S. gold futures for August delivery were down $8.60 an ounce at $1,170.30.
Financials, the index's most heavily weighted sector, edged up 0.2 percent. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, was flat at $76.49. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, gained 0.5 percent to C$53.31.
Sun Life Financial (TSE:SLF), Canada’s third-largest insurer, edged up 0.3 percent to C$41.74. Sun Life Financial is continuing to expand its U.S. operations, agreeing to buy Redmond, Washington-based investment manager Prime Advisors Inc. The financial terms have not been disclosed.
Wi-LAN (TSE:WIN), which owns patents for technology used in mobile phones, jumped 5.5 percent to C$2.89. The company’s longtime CEO Jim Skippen is set to retire. The transition for the top job will begin over the course of the year and Skippen has agreed to stay on until a replacement is named.
The junior S&P/TSX Venture Composite Index (CVE:OSPVX) gained 0.7 percent to 671.45 at 12:36 p.m. in Toronto.
In economic news, the Canadian dollar fell to its lowest in three weeks after a surprise economic contraction in April put a second rate cut back on the table.
The currency fell as output shrank 0.1 percent following a contraction in the first quarter, Statistics Canada said today. None of the 20 economists surveyed by Bloomberg predicted a decline and their median estimate was for a 0.1 percent expansion. Bank of Canada Governor Stephen Poloz had also been predicting a second-quarter rebound after a collapse in oil prices prompted him to cut the bank’s benchmark interest rate in January to spur growth.
In the U.S. market, shares rebounded from their biggest one-day loss of the year, as a last-minute diplomatic scramble got under way to keep Greece from defaulting on its debt payments. The S&P 500 (INDEXSP:.INX) rose 0.2 percent to 2,062.71 at 11:52 a.m. in New York. The 30-company Dow Jones Industrial Average (INDEXDJX:.DJI) added 0.2 percent to 17,625.11. The tech-heavy Nasdaq Composite (INDEXNASDAQ:.IXIC) leaped 0.5 percent to 4,981.93. Most followed shares included Juno, Celgene, Microsoft, Sony, ConAgra, Lowe’s, Abercrombie & Fitch, Berkshire Hathaway, Blackstone, KKR, General Electric, and Emerson Electric.
Canadian markets are closed tomorrow for Canada Day and U.S. markets are closed on Friday for Independence Day.