TORONTO — The Toronto Stock Exchange closed higher on Friday, buoyed by gains in the energy sector, as the price of crude oil crossed the US$93 mark.
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The major US stock indexes, for their part, retreated, victims of fears surrounding future interest rate hikes.
This last volatile session of the week came after high US inflation figures raised the likelihood of aggressive central bank action, while concerns over a possible Russian invasion of Ukraine helped to rattle investors. markets, observed Greg Taylor, chief investment officer at Purpose Investments.
“It’s been a volatile week and it’s still just an extension of the volatile year we’ve had, and that’s really to be expected, because central banks, after being super dovish for two years , are now showing their teeth.”
US inflation of 7.5% released this week was the highest in 40 years, and it firmed expectations of a rate hike, which put pressure on risky assets, particularly in the technology sector, he explained.
“A lot of things are in play, but it really comes down to bond yields more than anything, but in relative terms, Canada is the winner right now, due to our exposure to cyclical stocks.”
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The Toronto floor’s S&P/TSX Composite Index advanced 17.12 points to end the session with 21,548.84 points. The energy sector rose 3.6%, offsetting declines in the information technology, finance and industrials groups.
Suncor Energy shares rose 4.55% and Canadian Natural Energy rose 2.92% as crude oil prices rose US$3.22 to US$93.10 a barrel raw materials from New York.
The Industrials sector was hurt by a 6.35% drop in Magna International’s stock, after the auto parts maker said it was suffering from supply chain constraints and issued an outlook below analysts’ expectations for its 2023 fiscal year. Shopify’s stock meanwhile lost 4.4% amid a broader tech divestment.
In New York, the Dow Jones industrial average dropped 503.53 points to 34,738.06 points. The broader S&P 500 index fell 85.44 points to 4,418.64 points, while the Nasdaq Composite Index lost 394.49 points to 13,791.15 points.
In the currency market, the Canadian dollar traded at an average rate of 78.73 cents US, down from 78.85 cents US the previous day.
On the New York Commodities Exchange, the price of natural gas returned nearly 2 US cents to US$3.94 per million BTU. The price of gold rose US$4.70 to US$1842.10 an ounce and that of copper fell 15 cents US to US$4.51 a pound.
Statistics Canada is due to release inflation data for January next week, two weeks before the Bank of Canada announces its next monetary policy decision, which is expected to include an interest rate hike.
The Canadian Press