TSX Falters After Firm Start, But Recovers To End Modestly Higher

(RTTNews) - The Canadian stock market retreated after a bright start Thursday morning, and after swinging between gains and losses till the penultimate hour of the session, managed to find some support to eventually close modestly higher.

While optimism about U.S.-China trade agreement, and the Chinese central bank's monetary easing measures to boost growth set up a firm start for the Canadian market. However, losses in cannabis, energy and materials shares pushed the market down into negative territory.

Finally, thanks to some strong buying in information technology, industrial and consumer discretionary sections, the market rebounded into positive territory. A few stocks from the financial space too edged higher.

The benchmark S&P/TSX Composite Index ended up 36.52 points, or 0.21%, at 17,099.95. The index, which rose to 17,164.55 in early trades, touched a low of 17,043.47 in the session.

On Tuesday, the index closed at 17,063.43, posting a loss of 35.13 points, or 0.21%. The index, which scaled a new all-time high at 17,230.58 last week, gained about 19.1% in 2019.

Technology stock Enghouse Systems (ENGH.TO) ended stronger by more than 5.5%. The company announced it has acquired Dialogic Group Inc. for a purchase price of approximately $52.0 million. Dialogic's revenue over the next twelve months is projected to be between $58.0 million and $63.0 million.

Exfo Inc. (EXF.TO) gained 5% and Kinaxis Inc. (KXS.TO) gained 3.6%. Sierra Wireless (SW.TO), Shopify Inc. (SHOP.TO), Descartes Systems Group (DSG.TO) gained 2.6 to 3%. Blackberry (BB.TO) ended with a gain of 1.2%.

In the industrial section, Ballard Power Systems Inc (BLDP.TO) soared nearly 12%. New Flyer Industries (NFI.TO), Air Canada (AC.TO), Brookfield Business Partners (BBU.UN.TO), Cargojet (CJT.TO) and Bombardier Inc. (BBD.B.TO) gained 1.5 to 5.7%.

Consumer discretionary shares The Stars Group (TSGI.TO), Restaurant Brands International (QSR.TO), Magna International (MG.TO), Spin Master Corp (TOY.TO), Martinrea International (MRE.TO) and Brp Inc (DOO.TO) gained 1 to 1.7%.

Among the stocks in the financial section, Manulife Financial (MFC.TO), Fairfax Financial Holdings (FFH.TO), Onex Corp (ONEX.TO), Toronto-Dominion Bank (TD.TO), Royal Bank of Canada (RY.TO) and Sun Life Financial (SLF.TO) gained 0.6 to 1.35%.

Bank of Nova Scotia (BNS.TO) gained about 0.4%. The bank announced on Wednesday that it has completed the previously announced sale of its banking operations in Puerto Rico and the U.S. Virgin Islands to Oriental Bank, a subsidiary of OFG Bancorp.

Cannabis shares Aurora Cannabis (ACB.TO), Canopy Growth Corporation (WEED.TO), Aphria Inc. (APHA.TO) and Cronos Group (CRON.TO) declined 4 to 5.8%.

In the energy section, ARC Resources (ARX.TO), Enerplus (ERF.TO), Canadian Natural Resources (CNQ.TO)and PrairieSky Royalty (PSK.TO) declined 1.4 to 2%, while Shawcor (SCL.TO) and Encana Corp (ECA.TO) ended with impressive gains.

In the materials section, Methanex Corp (MX.TO), B2Gold Corp (BTO.TO), Canfor Corp (CFP.TO), Ssr Mining (SSRM.TO), Agnico Eagle Mines (AEM.TO) and Novagold (NG.TO) ended lower by 1.2 to 3%.

Teck Resources (TECK.B.TO), Lundin Mining (LUN.TO), Eldorado Gold (ELD.TO) and First Quantum Minerals (FM.TO) closed on a firm note.

On the economic front, a report from Markit Economics said the IHS Markit Canada Manufacturing PMI dropped to 50.4 in December 2019 from 51.4 in the previous month and short of expectations for a reading of 51.9. It was the lowest reading since August.

On Wall Street, stocks moved sharply higher over the course of the first trading session of 2020, extending the substantial upward move seen last year. With the continued advance, the major averages reached new record closing highs.

The Dow surged up 1.2%, the Nasdaq spiked 1.3% and the S&P 500 jumped 0.8%.

Stock markets across the Asia-Pacific region and Europe too ended on a firm note on Thursday.

In commodities, West Texas Intermediate crude oil futures for February ended up $0.12, or about 0.2%, at $61.18 a barrel, coming off a low of $60.64 a barrel.

Gold futures for February ended up $5.00, or about 0.3%, at $1,528.10 an ounce, the highest settlement since September 24.

Silver futures for March ended up $0.125 at $18.046 an ounce, while Copper futures for March settled at $2.8250 per pound, gaining $0.0280 for the session.

In trade news, U.S. President Donald Trump said earlier this week that the trade deal is due to be signed during a White House ceremony on January 15th.

Trump said in a post on Twitter on Tuesday that he would travel to Beijing at a later date to begin talks on phase two of a trade agreement.

Recent reports have indicated Chinese Vice Premier Liu He, Beijing's top trade negotiator, will be on hand to sign the phase one deal.