S&P/TSX composite dips even as gold price rises to near nine-year high

S&P/TSX composite dips even as gold price rises to near nine-year high

TORONTO — Canada’s main stock index dipped on rising COVID-19 infections but still outperformed its U.S. counterparts as the materials sector surged with the price of gold hitting a near nine-year high.

“In general, equity markets are taking a bit of a breather after an extended stretch of gains in the last week, which likely sparked some profit-taking,” said Candice Bangsund, portfolio manager for Fiera Capital.

The S&P/TSX composite index closed down 74.17 points at 15,595.50.

In New York, the Dow Jones industrial average was down 396.85 points at 25,890.18. The S&P 500 index was down 34.40 points at 3,145.32, while the Nasdaq composite was down 89.76 points at 10,343.89 after setting a record high of 10,518.98 in earlier trading.

Markets slipped on continued attention to rising COVID-19 infections in the U.S. that has prompted some states to reverse reopenings.

Stock markets have been fairly resilient to these headlines but investors are taking profits given “that there’s still a lot of uncertainty out there as to the progression of the virus and of course the global economy as well,” Bangsund said in an interview.

Materials was the leading sector on the TSX, gaining two per cent as the August gold contract was up US$16.40 at US$1,809.90 an ounce. That’s the highest level since Aug. 22, 2011. The September copper contract was up 2.25 cents at nearly US$2.80 a pound.

The movements helped Novagold Resources Inc. and Eldorado Gold, whose shares increased six and 5.7 per cent respectively.

Simmering economic and virus-related uncertainties have boosted investor demand for gold, which has been a safe haven even as equity markets have risen.

Copper has almost erased its losses stemming from COVID as Chinese demand has increased with factories reopening while prices have increased over a spike in infections in Chile, which is a predominant global production hub, said Bangsund. In fact, she said emerging markets are the new global hot spot and account for 46 per cent of global cases of COVID.

Technology was the only other sector on the TSX to gain, largely on the back of shares of Shopify Inc. climbing 3.1 per cent. The sector moved for most of the day in lockstep with the Nasdaq, which rose as some large technology companies continued to set new record highs.

Nine sectors were down Tuesday, led by energy, financials and consumer discretionary.

Energy dropped 2.6 per cent even though the price of crude oil slipped slightly after moving higher earlier in the day. Seven Generations Energy Ltd. lost 6.3 per cent while Husky Energy Inc. was down 5.25 per cent.

The August crude contract was down one cent at US$40.62 per barrel and the August natural gas contract was up 4.6 cents at nearly US$1.88 per mmBTU.

Analysts will be watching closely on Wednesday the weekly U.S. stockpile report for any sign of waning demand for gasoline during the very busy summer driving season, Bangsund said.

The heavyweight financials sector fell 1.8 per cent while a 5.2 per cent drop in Canada Goose Holdings Inc. shares sent consumer discretionary down nearly 1.8 per cent.

The industrials sector was hurt by a 4.2 per cent drop in the shares of Air Canada.

The Canadian dollar traded for 73.62 cents US compared with 73.84 cents US on Monday.

This report by The Canadian Press was first published July 7, 2020.

Companies in this story: (TSX:AC, TSX:SHOP, TSX:GOOS, TSX:VII, TSX:HSE, TSX:ELD, TSX:NG, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press

Business

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

COVID-19: Active cases in central zone up Tuesday

Central zone active cases remains lowest of all zones

Small force of locals team up for Sylvan Lake Underwater Cleanup

The annual cleanup was focused on getting an much garbage out of the lake as possible

Central zone active cases down to 20

Province provides update

Gord Bamford serenades Sylvan Lake at sold out concert

Gord Bamford played for a sold out crowd at a drive-in concert Sept. 19 in Sylvan Lake

Snake Lake Brewing takes home gold in the Canadian Brewing Awards

Central Alberta breweries Hawk Tail Brewery and Blindman Brewing also brought home top accolades

Quirky Canadian comedy ‘Schitt’s Creek’ takes Emmys by storm with comedy sweep

Toronto-raised Daniel Levy and Ottawa-born Annie Murphy both got supporting actor nods

Public health officials urge Canadians to limit contacts again as COVID-19 cases rise

Canada has committed $1 billion to buy at least 154 million doses of vaccines from five different companies

Majority of Canadians support wearing masks during COVID-19, oppose protests: poll

Nearly 90 per cent felt wearing a mask was a civic duty because it protects others from COVID-19

RCMP say body located of man who fell in river during stop for photos in Banff

Parks Canada has said the man was from India and living in Canada on a work visa

Paper towel in short supply as people stay home, clean more, industry leader says

While toilet paper consumption has returned to normal levels, paper towel sales continue to outpace pre-COVID levels

Lacombe beekeepers give the buzz on winterizing hives

Winterizing a honeybee hive is not a simple task, local apiarists say

Six injured, man in custody following BB gun incident in Alberta, RCMP say

Airdrie’s downtown core was told to shelter-in-place, while others nearby were asked to stay inside

Nearly 20 per cent of COVID-19 infections among health-care workers by late July

WHO acknowledged the possibility that COVID-19 might be spread in the air under certain conditions

Most Read