Toronto stock market closes higher as Ukraine/Russian tensions ease
TORONTO - The Toronto stock market closed higher Friday as traders hoped for an easing of tensions between Russia and Ukraine.
The S&P/TSX composite index was up 77.88 points to 15,196.31, after Russiaâ€™s Interfax reported that Russia had ended military exercises near the Ukraine border.
Still, many market watchers were unimpressed by the one-day bounce.
"Weâ€™ve been going down most days this week and today we are getting a bit of a bounceback, more of a trading correction than anything else," said Colin Cieszynski, senior markets analyst at CMC Markets Canada.
The Canadian dollar dropped 0.42 of a cent to 91.15 cents US as Statistics Canada reported that the economy created a paltry 200 jobs during July. Economists had generally expected that 20,000 jobs would be created.
U.S. indexes surged on the report with the Dow industrials ahead 185.66 points to 16,553.93, the Nasdaq gained 35.93 points to 4,370.90 and the S&P 500 index edged up 22.02 points to 1,931.59.
Geopolitical worries have pressured stock markets for much of this past week.
The Russia/Ukraine standoff is the primary focus for investor worry as traders considered the odds of Russia invading its neighbour in order to prop up Ukrainian rebels. There is also concern about how sanctions and countersanctions could derail a still-fragile economic recovery in Europe.
"It is a primary concern and how long these sanctions stay in place will certainly determine the impact on the region, which is already very fragile, and a struggle to regain any sort of momentum over the past few quarters or so," said Jean-Francois Dion, portfolio advisor at RBC Dominion Securities' wealth management division.
There were still market jitters going into the weekend in northern Iraq, where American warplanes bombed Islamic militants.
On top of this, there was a breakdown in the ceasefire between Israel and Hamas in Gaza.
Investors looking for safety had also bought into U.S. Treasuries. The yield on the benchmark 10-year bond stood at 2.42 per cent late-afternoon after going as low as 2.37 per cent.
The energy sector led advancers, up 1.74 per cent as September crude in New York gained 31 cents to US$97.65 a barrel.
August copper was unchanged at US$3.17 a pound and the base metals sector was ahead 0.92 per cent.
The TSX gold sector edged up 0.3 per cent as bullion prices dipped after two days of gains with the December contract in New York $1.50 lower to US$1,311 an ounce.
Financials were the biggest decliner, down 0.33 per cent.
It has also been a heavy week for Canadian corporate earnings, which have been generally positive.
On Friday, auto parts giant Magna International Inc. (TSX:MG) says net income rose to $510 million or $2.32 a share during the quarter, up from $415 million, or $1.78 per share, a year ago. Sales increased six per cent to a record $9.46 billion. The company also boosted its sale forecast for the year and its shares gained $7.02 or 6.09 per cent to $122.21.
A major TSX gainer was Canadian drugmaker Tekmira Pharmaceuticals. Its stock (TSX:TKM) closed at $23, up $7.39 or 47.3 per cent, after U.S. health authorities eased safety restrictions on an experimental drug to treat the deadly Ebola virus. The U.S. Food and Drug Administration had recently placed a hold on the drug after safety issues emerged in human testing
The Toronto market ended the week more or less flat, with a 19 point loss which still left the TSX up 11.56 per cent year to date. The Dow industrials ended the week with a gain of 60.56 points or 0.37 per cent.
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