- S&P/TSX has moved in tandem with commodities since Jan. 15
- Bombardier briefly falls below C$1 amid debt concerns
Canadian stocks recovered from early losses on Wednesday as the Standard & Poor’s/TSX Index continued a streak of moving in tandem with commodity and crude prices.
The S&P/TSX rallied for a second straight day, adding 0.4 percent to 12,377.77 at 4 p.m. in Toronto and erasing a decline of as much as 0.7 percent. Half of the index’s 10 main industries advanced. The S&P/TSX, which entered a bear market earlier this year, is poised for its worst monthly performance since May 2012.
Canada’s benchmark index has moved closely with raw materials prices this year, as investors in the country’s resource-heavy equities market weigh tumbling oil prices and signs of slowing growth in China. The S&P/TSX has moved in the same direction as a Bloomberg index of commodities every day since Jan. 15, according to data compiled by Bloomberg.
Energy stocks in the S&P/TSX reversed losses to jump 0.8 percent, with 40 companies in the 55-member index advancing. Precision Drilling Corp. and Pengrowth Energy Corp. led gains, each adding more than 6.6 percent. Oil erased a decline as stockpiles at the biggest U.S. storage hub dropped even as nationwide crude supplies climbed to the highest level since 1930.
Raw-materials advanced more than any group in the S&P/TSX, climbing 1.2 percent as the Bloomberg commodity index jumped 0.8 percent. Gold bullion, this month’s best performing metal, was at a two-month high before the U.S. Federal Reserve bank ends a two-day meeting. Concerns over the strength of the global economy has boosted demand for the haven and prompted investors to push back expectations of when the Fed will next raise borrowing costs.
Technology shares also advanced, adding 0.4 percent on a 4 percent surge in CGI Group Inc. The company reported quarterly earnings and revenue that topped analyst estimates. Profits in the first quarter were C$0.84 a share, compared with expectations of C$0.83, the company said.
Health-care shares fell the most in the S&P/TSX with a 3.8 percent loss as a 4.6 percent decline in Concordia Healthcare Corp. weighed on the group of five stocks.
Telephone companies also retreated, after Rogers Communications Inc., Canada’s largest wireless operator, reported fourth-quarter earnings that missed analysts’ estimates as increased competition for subscribers led to higher advertising and promotions costs. Rogers shares slumped 5.4 percent for the biggest drop in the S&P/TSX.
Bombardier Inc.’s shares briefly fell below C$1, before closing at that level. It’s the latest blow for the iconic Canadian manufacturer as it buckles under $9 billion in debt. The rout raises the prospect that the aircraft maker will be thrown out of the main Canadian stock gauge.