TSX bounces back after China warning
TORONTO — The Toronto Stock Exchange bounced back at the close Monday, erasing losses earlier in the day, as Wall Street indexes fell moderately.
On Bay Street, the S&P/TSX composite index was up 21.25 points at 15,629.75 — its second consecutive positive trading day.
The commodity-heavy index had been down after China, the second-largest economy in the world, cut its economic growth forecast. Over the weekend, Premier Li Keqiang, China’s top economic official, trimmed the country’s growth target to 6.5 per cent, down from last year’s expansion of 6.7 per cent. Li also warned of dangers from global pressure for trade controls.
The prospect of slower growth in China hurt mining, packaging and chemical companies and sent the price of copper lower.
In New York, stocks ended broadly lower, with banks and materials companies incurring some of the biggest losses.
The Dow Jones lost 51.37 points to 20,954.34, the S&P 500 index shed 7.81 points to 2,375.31, and the Nasdaq composite index fell 21.57 points to 5,849.18.
The modest declines followed U.S. President Donald Trump’s claim Saturday that his predecessor Barack Obama had tapped the telephones at Trump Tower during the U.S. election campaign.
The statement also comes amid the swirl of revelations about contacts between Trump aides and Russia’s ambassador to the U.S., both during and after a presidential election Russia is believed to have meddled in. The president has been trailed for months by questions about his campaign’s ties to Russia. “Obviously one of the uncertainties and risks from President Trump has been his sometimes inflammatory rhetoric in the media,” said Craig Fehr, a Canadian markets strategist at Edward Jones in St. Louis. “This weekend probably falls into this category.”
Still, Fehr added, “I think that again the markets have found comfort that outside some of the tweets and some of the headlines, that Trump’s economic agenda actually shows a lot of promise.”
The U.S. president’s repeated promises to reform taxes, slash red tape and ramp up spending on defence and infrastructure projects have seen the markets perform well since the U.S. election in November.
Major New York indexes had experienced small gains on Friday following a speech that day by Fed chair Janet Yellen, who said the central bank will likely lift its key interest rate this month, citing an improving job market and rising inflation.
The Canadian dollar was at 74.57 cents US, down 0.17 of a cent from Friday’s close.
The April crude contract lost 13 cents at $53.20 per barrel and April natural gas was up seven cents at $2.90 per mmBTU. April gold gave up $1 at $1,225.50 an ounce and May copper fell 4.5 cents at $2.65 a pound.