TORONTO – The summer doldrums may have begun for the Toronto stock market, which ended flat Thursday ahead of a long holiday weekend and after two days of solid gains that saw it recoup most of the losses it suffered following last week’s surprise Brexit vote.
The S&P/TSX composite index added 27.80 points or 0.2 per cent to 14,064.54, with a lift mainly from mining issues. Canada’s main market now has recovered all but 66 points of the big losses it suffered after the British vote to leave the European Union.
“A lot of people are taking off early today,” Allan Small, a senior adviser at Holliswealth, said of the low trading volumes on the TSX ahead of Canada Day on Friday.
“I think that is playing a factor. We can expect a lacklustre trading day on Monday as well for the (U.S.) holiday, so it’s a good excuse for people to take an extra long weekend.”
But Small cautioned that although summer is often a quiet time for stock markets, investors can expect even more volatility than usual when economic data is released or earnings season kicks off again.
Next week, all eyes will be on the latest jobs figures in the U.S., due out Friday. Markets will be watching to see if May’s disappointing report was just a blip and or indicative of a long-term trend.
The U.S. Federal Reserve left its key interest rate unchanged in June due to weak economic indicators after it originally planned on hiking rates up to four times this year. Economists now anticipate the central bank will raise only once, perhaps in December, due to the fallout from the British vote.
The Fed holds its next rate meeting in July.
“I wish they would increase rates in July. It would send a positive signal that they think the economy is healthy enough to do that,” said Small.
Meanwhile, New York forged strongly ahead for a third straight day as the Dow Jones industrials rose 235.31 points to 17,929.99. The broader S&P 500 was up 28.09 points at 2,098.86, while the Nasdaq composite added 63.42 points to 4,842.67.
The Canadian dollar was higher for a third consecutive session, climbing 0.35 of a U.S. cent to 77.42 cents US despite lower oil prices as the August contract for benchmark North American crude lost $1.55 to US$48.33 a barrel.
It has been a volatile year so far for the commodity-heavy TSX, which hit its lowest point in February when benchmark crude was trading around US$30 amid concerns about global oversupply and weak demand.
In other commodities, August natural gas rose six cents to US$2.92 per mmBTU, while August gold fell $6.30 to US$1,320.60 a troy ounce and September copper added a penny to US$2.20 a pound.
Overseas, Britain’s FTSE 100 rose 2.27 per cent. Britain’s stock market has regained its losses since the Brexit vote, though that is largely thanks to a 10 per cent drop in the pound, which helps big companies’ overseas earnings. Other indexes of companies more focused on the British economy are still down sharply.
— With files from The Associated Press.
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