At the open: TSX rises as energy shares gain

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May 14, 2018
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May 17, 2018

At the open: TSX rises as energy shares gain

Canada’s main stock index opened higher on Monday, helped by gains in energy shares due to a rise in oil prices.

The Toronto Stock Exchange’s S&P/TSX Composite Index rose 33.54 points, or 0.21 per cent, to 16,016.86.

The Canadian dollar edged higher against its U.S. counterpart on Monday as the greenback broadly fell and oil prices rose.

The U.S. dollar headed for its fourth successive day of losses as broad risk appetite returned and investors questioned whether a recent rally by the greenback had run out of steam.

The price of oil, one of Canada’s major exports, held near 3-1/2 year highs even as resistance emerged in Europe and Asia to U.S. sanctions against major crude exporter Iran. U.S. crude prices were up 0.16 per cent at $70.81 a barrel.

The Canadian dollar was trading 0.2 per cent higher at $1.2763 to the greenback, or 78.35 U.S. cents. The currency traded in a range of $1.2753 to $1.2794.

On Friday, the loonie reached a three-week high at $1.2730 but was then pressured by domestic data showing a surprise April jobs decline.

U.S. stock indexes opened higher on Monday on signs of easing U.S.-China trade tensions after President Donald Trump softened his stance on ZTE Corp, pledging to help the Chinese technology company “get back into business, fast.”

The Dow Jones Industrial Average rose 48.20 points, or 0.19 per cent, at the open to 24,879.37. The S&P 500 opened higher by 5.65 points, or 0.21 per cent, at 2,733.37. The Nasdaq Composite gained 26.57 points, or 0.36 per cent, to 7,429.45 at the opening bell.

Mr. Trump’s comments on Sunday came ahead of trade talks between Chinese Vice Premier Liu He and U.S. officials this week as they seek to resolve trade disputes.

The U.S. Commerce Department last month banned American companies from selling to the Chinese tech company for violating an agreement.

Mr. Trump’s unexpected announcement helped drive big gains in shares of U.S. suppliers to ZTE. Optical components maker Acacia Communications jumped 13.3 per cent, while Oclaro and Lumentum Holdings rose between 5 per cent and 9 per cent.

Also helping the mood was news that China had resumed its review of chipmaker Qualcomm’s proposed $44-billion takeover of NXP Semiconductors. NXP surged 10.1 percent and Qualcomm 3.2 per cent.

“Some of the headlines point to signs that Trump might be watering down his tough talks on trade,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Wall Street’s main indexes posted solid gains last week, helped by a surge in oil prices, easing inflation fears and Apple’s rally that took it close to $1-trillion in market capitalization.

The S&P 500 and the Dow Jones Industrial Average crossed their 100-day moving averages, a key technical level, for the first time in nearly a month.

“It looks like the markets want to move up, and there seems to be a rosier outlook for geopolitics especially North Korea,” Cardillo said.

U.S. Secretary of State Mike Pompeo said on Sunday that Washington would agree to lift sanctions on North Korea if the country agrees to completely dismantle its nuclear weapons program.