TORONTO — Energy sector strength amid rising oil prices proved insufficient to overcome broader market weakness and Canada's main stock index closed lower on Wednesday.
The S&P/TSX composite index fell 32.04 points to 19,171.66.
Only two sectors were positive on the day, with energy gaining more than four per cent and materials up 0.56 per cent, while information technology followed U.S. tech stocks lower, the worst performer in Toronto with a loss of 1.76 per cent.
The May crude oil contract jumped US$2.97 to US$63.15 per barrel after the International Energy Agency raised its forecast for oil demand this year by 230,000 barrels per day to 96.7 million barrels.
A separate U.S. government report also showed that the amount of oil supplies in inventory fell sharply last week. Meanwhile, the May natural gas contract was unchanged at US$2.62 per mmBTU.
Energy stocks gained on expectations that a resurgent economy will burn more petroleum products, with Canadian oilsands producer MEG Energy Corp. jumping by just under 10 per cent to $6.84 and Whitecap Resources Inc. rising by 9.04 per cent to $5.81.
Larger producers Suncor Energy Inc. and Cenovus Energy Inc. were second and third most active on the day in Toronto, rising by 3.91 per cent and 5.93 per cent, respectively.
"It's that general reopening theme," said Michael Greenberg, vice-president and portfolio manager for Franklin Templeton Investment Solutions.
"Instead of just driving to Loblaws once a week, maybe I actually go do a road trip soon and start using more gas."
In New York, the Dow Jones industrial average gained 53.62 points at 33,730.89 as Goldman Sachs, JPMorgan Chase and Wells Fargo all unveiled first-quarter earnings that blew past analysts’ forecasts.
Much of the surge was due to expectations for a rapidly improving economy, which allowed banks to free up reserves held in case loans went bad, as well as strong trading revenue.
Greenberg said the market has been of two minds this year, with the first quarter following an economic reopening theme with cyclicals and value stocks outperforming, then reversing last month to where growth outperformed and value was faltering.
"Today, the market's gone back to those first-quarter themes of a little more of a cyclical bent to the market, so you're seeing some of the value sectors, energy and materials, doing well," he said.
"In the U.S. you've got small-caps doing well, tech underperforming."
The tech-heavy S&P 500 index was down 16.93 points at 4,124.66 thanks to drops for several heavyweight tech stocks, including Apple and Amazon, while the Nasdaq composite was down 138.26 points at 13,857.84 despite the surging debut of Coinbase Global, an exchange for bitcoin and other digital currencies.
In Toronto, tech sector member Absolute Software Corp. fell 5.56 per cent and Tecsys Inc. was down 5.39 per cent.
The Canadian dollar, which normally draws strength from higher oil prices, traded for 79.79 cents US compared with 79.66 cents US on Tuesday, underperforming other currencies such as the Euro and the Australian dollar, Greenberg pointed out.
He suggested the smaller gain might be related to next Monday's federal budget in Canada, the first in two years.
"That partly could be the expectation that there's going to be just a little bit more fiscal spending to come still in Canada," he said, adding higher deficits represent a headwind for the loonie.
The June gold contract was down US$11.30 at US$1,736.30 an ounce and the May copper contract was up almost 10 cents at US$4.13 a pound.
— By Dan Healing in Calgary.
This report by The Canadian Press was first published April 14, 2021.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X, TSX:ABST, TSX:TCS, TSX:MEG, TSX:WCP, TSX:SU, TSX:CVE, )
The Canadian Press