Canada’s benchmark index inched up on Monday as calm returned after a week of turmoil, but rising tensions in the Middle East and upcoming data from the U.S. this week kept investors on edge.
The S&P/TSX composite index closed up 95.01 points at 22,406.31, rising 0.43%. The increase was further aided by two major local acquisitions.
Oil prices surged on Monday to $80.06 a barrel on fears that rising tensions in the Middle East could lead to a broader conflict and choke crude oil supplies globally.
This fueled the energy stocks index which rose roughly 3%, and was further boosted by Canada’s biggest gas driller Tourmaline Oil Corp’s C$1.3 billion ($945.87 million) offer to buy smaller rival Crew Energy.
The energy index accounts for close to 18% of the total weight of the S&P/TSX composite index.
“The Canadian market obviously welcomes uncertainty in the Middle East for the oil stocks,” said Barry Schwartz, chief investment officer at Baskin wealth Management.
“Of course, the world doesn’t want to see any of that,” he added, highlighting why investors were on the edge.
Canada’s materials sector also logged gains, pulled up by a 63% spike in Osisko Mining, which jumped to the top of the TSX after South Africa-based Gold Fields Ltd agreed to acquire the Canadian miner for C$2.16 billion ($1.57 billion).
Barrick Gold shares rose 9.4% as the gold miner beat Wall Street estimates for second-quarter profit, adding to the sector’s rise. Other miners also tracked gains in gold and copper prices.
Investors were cautious ahead of a host of economic data expected in the United States this week, including the U.S. consumer price index due on Wednesday to gauge the Federal Reserve’s stance on its monetary policy.
“Ideally, we don’t want to see too soft data to show that the U.S. is falling into recession,” said Allan Small, senior investment adviser at Allan Small Financial Group with iA Private Wealth.
“But at the same time we don’t want to see strong data which would show us persistent inflation.”
U.S. retail sales data is expected on Friday.
Markets are hoping for an interest rate cut at the U.S. central bank’s September meeting.
(Reporting by Promit Mukherjee in Ottawa and Nikhil Sharma in Bengaluru; Editing by Shreya Biswas and Jonathan Oatis)