Canada’s main stock index rose at open on Tuesday as higher oil prices lifted energy stocks and concerns around Turkey’s currency crisis receded.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 21.86 points, or 0.13 per cent, at 16,272.61.
The Canadian dollar strengthened against its U.S. counterpart on Tuesday as oil prices rose and the threat from the collapse of the Turkish lira ebbed.
World equities markets regained their footing as Turkey’s currency rebounded about 5 per cent against the greenback and reassuring German economic data offset signs of slowing growth in China.
Investors have worried that a crisis in Turkey could spread to other emerging market countries. Canada exports many commodities and runs a current account deficit so its economy could be hurt if the flow of trade or capital slows.
The price of oil, one of Canada’s major exports, jumped after Saudi Arabia said it cut production, adding to concerns over global supply as U.S. sanctions against Iran curb its exports.
At 9:07 a.m. ET, the Canadian dollar traded 0.4 per cent higher at $1.3086 to the greenback, or 76.42 U.S. cents. The currency, which touched a near 3-week low of $1.3179 on Monday, traded in a range of $1.3072 to $1.3135.
U.S. stocks opened higher on Tuesday on the back of healthy earnings reports and a recovery in Turkish currency, which snapped its three-week slide.
The Dow Jones Industrial Average rose 27.99 points, or 0.11 per cent, at the open to 25,215.69.
The S&P 500 opened higher by 5.95 points, or 0.21 per cent, at 2,827.88. The Nasdaq Composite gained 28.18 points, or 0.36 per cent, to 7,847.88 at the opening bell.
“The Turkey currency crisis isn’t going to grow any bigger (and) the markets are good at pricing things like this,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
“The spate of earnings today has people focusing back on what matters and that is U.S. economic data and earnings reports.”
Oil prices jumped on Tuesday after Saudi Arabia said it cut production, adding to concerns over global supply as U.S. sanctions against Iran curb its exports, though the prospect of a slowdown in global economic growth kept a lid on markets.
Global benchmark Brent crude had risen $1.32, or 1.8 per cent, to a high of $73.93 a barrel. U.S. light crude was up $1.10 a barrel at $68.30.
“Oil prices are on the rebound as bulls take heart from an unexpected dip in Saudi oil output and the lingering Iranian wildcard,” said Stephen Brennock, analyst at London brokerage PVM Oil Associates.
Saudi Arabia told the Organization of the Petroleum Exporting Countries that it had reduced crude output by 200,000 barrels per day (bpd) to 10.29 million bpd in July.
OPEC itself, using secondary sources, estimated in a report published on Monday that Saudi production was at a slightly higher level of 10.39 million bpd last month.
Reuters