OCT: Canadian cross-listed gold stocks rise; oil and financials fall
Canadian investors were left in the dark Wednesday due to a technical glitch that wiped out a full day of trading on Canada’s main exchange. But indications from trading activity on U.S exchanges likely would have seen the Canadian index droop on oil and financials while gold and materials stocks may have muted the losses.
The S&P/TSX Composite Index remained unchanged from Tuesday’s close at 8,724.11, after trading was halted for the entire day starting at 9:48 a.m. ET after the data streaming emanating from the country’s main exchange malfunctioned. The market, which is expected to reopen for trading Thursday morning, was put into a “pre-open state” between 3 p.m. and 5 p.m. ET on Wednesday to allow participants the option of cancelling, adding or changing orders. The TSX Venture exchange was also halted Wednesday. On Tuesday it closed at 723.46. The Canadian dollar closed up 35 basis points to 83.56 cents US.
“It’s embarrassing,” said David Baskin, president of Baskin Financial Services, about the lost day of trading. “It’s bush league and I imagine it will cost the Bay Street firms a fortune in revenue. They won’t be happy about it.”
He noted, however, that several Canadian stocks dual-listed in Toronto and New York had banner days in the U.S.
“If you looked at some of the big cap names like Barrick Gold Corp. up two per cent, BCE Inc. up three per cent, Potash Corp. of Saskatchewan, up four per cent, I would have guessed that Toronto may have been up at one point maybe 100 points, maybe 150 points, but it’s tough to really tell.”
Cross-listed materials stocks fared well, especially gold stocks like Barrick and Goldcorp., which both rose two per cent in New York on another strong day for gold prices. Bullion climbed to $868.50 US an ounce, up $25.80 US. The Canadian dollar closed up 35 basis points to 83.56 cents US.
Financials, including Canada’s five major banks and the country’s two biggest life insurance companies, Manulife Financial Corp. and Sun Life Financial, were down across the board.
Energy bellwethers, Canadian Natural Resources Ltd., and Suncor Energy Inc., slumped in U.S trading, losing 2.1 per cent and 1.7 per cent respectively, as oil prices swooned to their lowest level in four years to $40.06 US a barrel, down $3.54. OPEC announced a record nine per cent supply cut, but many observers worry it is still not enough to offset falling world energy demand.
Meanwhile, U.S. stocks fell as investors took profits from Tuesday’s late day rally on the U.S. Fed’s decision to cut its benchmark interest rate to as low as zero.
The Dow Jones industrial average fell 99.80 points, or 1.12 per cent, to 8,824.34. The S&P 500 was down 8.76 points, or 0.96, per cent to 904.42 and the Nasdaq composite index closed down 10.58 points, or 0.67 per cent, to 1,579.31.
“While some of (the losses) may be due to normal profit-taking, with equities once again stalling near key resistance levels, it appears that some investors may be taking a second look at the potential implications of a drop in rates to near zero,” said Colin Cieszynski, a technical analyst for CMC Markets. “In some ways, (Tuesday’s) move may have raised more questions than answers.”
