S&P/TSX composite bounces back after early pressure from lower oil prices

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This article was published 20/07/2022 (842 days ago), so information in it may no longer be current.

TORONTO – North American stock markets continued their July recoveries despite early pressure Thursday from lower crude oil prices and Europe’s central bank raising interest rates for the first time in 11 years.

The S&P/TSX composite index closed up 42.18 points to 19,062.85 after hitting an intraday low of 18,870.76. It is up 1.1 per cent so far this month after falling nine per cent in June.

In New York, the Dow Jones industrial average was up 162.06 points at 32,036.90. The S&P 500 index was up 39.05 points at 3,998.95, while the Nasdaq composite was up 161.96 points at 12,059.61.

Technology was the star of the day on the TSX, climbing 2.1 per cent with Shopify Inc. adding another 4.8 per cent.

“It’s the most positive trend we’ve seen in technology in probably in six, seven, eight months,” said Michael Currie, vice-president and investment adviser at TD Wealth.

U.S. markets are up even more than the TSX so far in July with Nasdaq gaining 9.3 per cent, a reversal from June’s 8.7 per cent loss. But the increase should be taken with a grain of salt because the tech-heavy index is down nearly 30 per cent in 2022, he said.

“So it’s got a ways to catch up, but we are seeing some signs that the heavily beaten down technology sector is starting to catch a recovery, which might be a little bit tied to … (the possibility of) a recession, that means less chance of more rate hikes which has been a big negative for technology.”

Materials moved higher on the day as bullion prices increased.

The August gold contract was up US$13.20 at US$1,713.40 an ounce and the September copper contract was down 2.7 cents at US$3.30 pound.

Health care and energy were by far the weakest sectors on the TSX. Canopy Growth Corp. lost 9.2 per cent to push the cannabis-loaded sector down 2.6 per cent.

Energy lost 2.2 per cent as crude oil weakness pushed Athabasca Oil Corp. down 6.6 per cent. It fell on U.S. stockpiles coming in higher than expected last week and the ECB hiking its rates by double the expected quarter percentage point increase.

The September crude contract was down US$3.53 at US$96.35 per barrel and the August natural gas contract was down 7.5 cents at US$7.93 per mmBTU.

“As usual, whatever energy does is what Toronto does and today is a bad day for energy,” Currie said in an interview.

“If you take that into account, the rest of market’s certainly doing pretty well in Toronto.”

The Canadian dollar traded for 77.55 cents US compared with 77.62 cents on Wednesday.

This report by The Canadian Press was first published July 21, 2022.

Companies in this story: (TSX:ATH, TSX:WEED, TSX:SHOP, TSX:GSPTSE, TSX:CADUSD=X)