TORONTO – Canada’s main stock index eked out a minor gain Tuesday, as shares of Bombardier Inc. soared following its CSeries deal with Airbus.
Shares in Bombardier (TSX:BBD.B) were the most heavily traded stock on the Toronto Stock Exchange as they gained nearly 16 per cent or 37 cents at $2.73 at the end of the trading session. The company announced a deal late Monday that will see Airbus obtain a majority stake in the CSeries aircraft.
“I think that’s come at good time because we’ve had a lot more concerns about NAFTA in general for Canada, a lot of focus on not only Bombardier but other companies in terms of manufacturing and the outlook going forward,” said Andrew Pyle, a senior wealth adviser at Scotia Wealth Management. “So I think today’s news was positive and we saw that reflected in the stock.”
Meanwhile, the S&P/TSX composite index itself advanced a mere 14.20 points to 15,816.90.
“The story today is less what’s going on with the TSX on the surface,” said Pyle, pointing to other Canadian developments, including the announcement by the country’s banking regulator Tuesday that it’s going ahead with a new stress test for home buyers who don’t need mortgage insurance.
The move, which is expected to reduce the maximum amount buyers will be able to borrow to buy a home, had a negative impact on shares of alternative lenders, he said.
But far bigger drops were experienced by several licensed marijuana producers after the Toronto Stock Exchange said late Monday that firms with business activities that violate U.S. federal law regarding cannabis could undergo a delisting review.
Aphria Inc.’s stock (TSX:APH) was down $1.06, or 13.38 per cent, to $6.86, while shares of Canopy Growth Corp. (TSX:WEED), Canada’s biggest licensed marijuana producer, fell 61 cents, or 4.65 per cent, to $12.52.
South of the border, there was also little movement on Wall Street.
In New York, the Dow Jones industrial average was up 40.48 points to 22,997.44 and the S&P 500 index was up 1.72 points to 2,559.36, both record highs. The Nasdaq composite index was down 0.35 of a point to 6,623.66.
“I think markets are basically in a holding mode right now,” said Pyle. “This is pretty common for a market that has moved up pretty strongly over such a short period of time.
“If you look back at this time last year when we were going into the U.S. election with the Dow trading close to 18,000 and now getting to that 23,000 level that we hit today, you are going to get markets or investors taking a bit of a step back.”
In currency markets, the Canadian dollar was trading at an average price of 79.69 cents US, down 0.12 of a cent.
In commodity news, the December crude contract was down three cents to US$52.11 per barrel and the November natural gas contract was up two cents at US$2.96 per mmBTU.
The December gold contract was down $16.80 to US$1,286.20 an ounce and the December copper contract was down four cents to US$3.20 a pound.
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