At the open: TSX rises, CP Rail up on earnings beat


TMX Group Inc. signage is seen at the Toronto Stock Exchange (TSX) in this file photo. (Pawel Dwulit/Bloomberg)

Canada’s main stock index rose in early trading on Thursday, as Canadian Pacific Railway Ltd jumped on an earnings beat and banks and many other financial stocks also gained.

The Toronto Stock Exchange’s S&P/TSX composite index was up 47.13 points, or 0.30 per cent, at 15,600.01 shortly after the open. Nine of its 10 main groups gained.

CP shares were up 2.8 per cent to $207.67 in early trading after the company reported a higher-than-expected quarterly profit as it earned more from shipments of commodities such as grain and coal. It also expressed optimism that demand was improving.

The Canadian dollar was little changed at a one-month low against its U.S. counterpart on Thursday after two days of sharp losses, as oil prices steadied and domestic bond yields picked up slightly more than Treasuries.

The Canadian dollar was trading at $1.3488 to the greenback, or 74.14 U.S. cents, slightly stronger than Wednesday’s close of $1.3480, or 74.18 U.S. cents.

It was trading in a tight range between $1.3462 and $1.3495, after changing hands in the $1.33 range earlier in the week.

Oil prices regained some ground as leading Gulf oil producers signaled a likely extension of OPEC-led supply cuts beyond the middle of the year.

Investors are also awaiting inflation data due at 8:30 a.m. on Friday for further signs that the country’s economy is picking up. Economists polled by Reuters expect consumer prices to have risen 0.4 per cent in March, up from 0.2 per cent in February.

Canadian government bond prices were lower across the maturity curve, with the two-year price down 3.4 Canadian cents to yield 0.742 percent and the benchmark 10-year

Wall Street opened higher on Thursday as the quarterly earnings season kicked into high gear.

The Dow Jones Industrial Average rose 32.06 points, or 0.16 per cent, to 20,436.55. The S&P 500 gained 5.52 points, or 0.23 per cent, to 2,343.69. The Nasdaq Composite added 23.33 points, or 0.4 per cent, to 5,886.37.

Oil prices regained some ground, after steep losses in the previous session, as leading producers signaled a likely extension of OPEC-led supply cuts beyond the middle of the year.

“We’re looking at a higher opening, helped by a rebound in oil prices,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

“We’ve had some strong earnings with more positive surprises than negative, but the overall market trend remains negative because of geopolitical concerns.”

With Wall Street near record levels and worries over President Donald Trump’s ability to deliver on his pro-growth promises, investors are hoping first-quarter earnings will be strong enough to justify lofty market valuations.

Of the 57 companies in the S&P 500 that have reported earnings through Wednesday morning, about 75 per cent have topped expectations, according to Thomson Reuters data, above the 71 per cent average for the past four quarters.

Overall, profits of S&P 500 companies are estimated to have risen 10.8 per cent in the quarter, the best since 2011.

Key companies scheduled to report results on Thursday include Dow component and toymaker Mattel.

However, mounting tensions between North Korea and the United States and the looming French presidential elections are keeping investors away from making risky bets.

A closely watched poll showed Centrist Emmanuel Macron hung on to his lead as favorite to win France’s presidential election in a four-way race that is too close to call.

Oil prices regained some ground on Thursday, after steep losses in the previous session, as leading Gulf oil producers signaled a likely extension of OPEC-led supply cuts beyond the middle of the year.

Brent crude futures were at $53.45 per barrel, up 52 cents from their last close.

U.S. crude futures were up 45 cents at $50.89 a barrel.

OPEC members Saudi Arabia and Kuwait signaled that an effort by the Organization of the Petroleum Exporting Countries and other producers, including Russia, to cut oil output was likely to be extended beyond June.

But bloated inventories weighed. Despite a drop in U.S. crude stocks last week, an unexpected 1.5-million-barrel build in gasoline stocks drove prices more than 3.5 percent lower on Wednesday.

U.S. crude oil production rose to 9.25 million barrels per day, official data showed, up almost 10 per cent since mid-2016.

“The rebalancing in U.S. crude stocks may have got under way, but concerns of further gasoline builds are rife even as the U.S. summer driving season shifts up a gear,” said Stephen Brennock, an analyst with PVM Oil Associates.

“With questions hanging over U.S. gasoline demand, any further product builds will act as a brake on the oil price recovery.”

Global fuel stocks are well above the five-year average, and Saudi Energy Minister Khalid al-Falih was quoted on Thursday as saying inventories remained elevated in part because traders were selling supplies out of tanker storage.

In China, signs emerged that refiners were using record crude imports to produce more fuel such as gasoline and diesel than the country can absorb.

China’s March gasoline output rose 2.5 per cent year-on-year to 11.24 million tonnes, the highest level since at least April 2014, China’s National Bureau of Statistics said, adding fuel into an Asian market that is already well supplied.