TORONTO – Canada’s main stock index inched higher in Monday trading led by a strong performance from cannabis companies while the U.S. bull market continued.
Equity markets on both sides of the border saw minor gains, partly a reflection of an absence of any news about trade or tariffs between China and the United States that allowed markets to follow their natural inclination to grind a little higher, said Craig Fehr, Canadian markets strategist for Edward Jones.
“With an absence of that worrisome news, markets have been a little bit more focused on the economics and earnings data, which is largely supportive of stocks moving higher,” he said in an interview.
The S&P/TSX composite index was up 7.32 points at 16,331.03, lead by pot producers such as Aurora Cannabis Inc., which closed up 17.08 per cent, Canopy Growth Corp., which gained almost 11 per cent and Aphria Inc., which closed up 7.47 per cent.
The intraday high hit 16,370.92, with 208.75 million shares traded.
Cannabis stocks have been extremely volatile, performing very well over the past couple of years and bouncing back after some recent weakness.
Fehr said he expects the high volatility will continue.
“We’re still in the infancy as it relates to the regulatory landscape and as it relates to the long-term competitive landscape and so I think for those investors that are in that area you should continue to expect volatility. Today is just the upside of a volatile period.”
Canopy and Aphria led the cannabis-heavy S&P/TSX capped health-care index to a gain of 7.43 points or 7.79 per cent, offsetting a 6.35 per cent drop by ProMetic Life Sciences.
The consumer staples index sustained the largest decrease, losing 4.48 points or 0.82 per cent, led by a 1.35 per cent drop by Alimentation Couche-Tard and 1.34 per cent by George Weston.
Information technology stocks closed down 0.73 per cent, led by Quarterhill Inc. and Constellation Software.
Consumer discretion stocks closed down slightly as more than five-per-cent gains for Canada Goose Holdings and Cineplex Inc. offset a 4.7 per cent drop by Quebecor Inc. and 2.66 per cent by Sleep Country Canada Holdings.
Bombardier’s shares lost five cents in heavy trading of nearly seven million shares as the industrials sector slipped slightly despite a 2.96 per cent gain by Air Canada.
In New York, the Dow Jones industrial average was up 89.37 points at 25,758.69. The S&P 500 index was up 6.92 points at 2,857.05, while the Nasdaq composite was up 4.68 points at 7,821.01
The S&P 500 is nearing the longest bull run in its history, reflecting how much ground has been made up since the financial crisis and driven by earnings growth amid an expanding economy that isn’t showing any immediate sign of breaking down, Fehr added.
The Canadian dollar averaged 76.54 cents US, up .09 of a US cent.
The October crude contract was up 21 cents at US$65.42 per barrel and the September natural gas contract was down one cent at US$2.94 per mmBTU.
The December gold contract was up US$10.40 at US$1,194.60 an ounce and the September copper contract was up four cents at US$2.67 a pound.