Canada’s main stock index rose on Friday after data showed annual inflation rate dipped as price pressures from gas and air travel eased.
The Toronto Stock Exchange’s S&P/TSX composite index was up 65.97 points, or 0.43 per cent, at 15,470.10.
Statistics Canada said the annual inflation rate in September fell to 2.2 per cent from 2.8 per cent as price pressures from gas and air travel eased.
Investors, however, expect the central bank to raise interest rates again next week.
“We always knew we were going to see headline CPI inflation trend back down towards 2 per cent ... the hike next week is going to happen,” said Andrew Kelvin, senior rates strategist at TD Securities.
The sentiment was boosted by the energy sector , which rose 0.7 per cent as oil prices moved up on signs of surging demand in China, the world’s second-biggest oil consumer.
Transcanada Corp. rose 1.5 per cent, while Enbridge Inc. jumped 1.3 per cent. Suncor Energy Inc. finished 1 per cent higher.
The materials sector, which includes precious and base metals miners, added 0.6 per cent, as copper and nickel prices rose after regulators in China pledged support for firms with liquidity issues, brought on by months of slowing growth.
Conversely, marijuana producers led a 3.5-per-cent drop in health care stocks. Aphria Inc. was down 5.9 per cent, while Aurora Cannabis Inc. and Canopy Growth fell 5.5 per cent and 4.1 per cent, respectively.
The Canadian dollar was trading 0.2 per cent lower at 1.3115 to the greenback, or 76.25 U.S. cents. The currency touched its weakest since Sept. 11 at 1.3132.
For the week, the loonie declined 0.7 per cent. It was the third consecutive week the loonie lost ground.
Globally, stocks erased gains on Friday, with a global index struggling to avoid a fourth consecutive weekly loss, while the euro and sterling rallied against the dollar after a report said the UK is ready to drop a key Brexit demand.
The Mexican peso touched a five-week low versus the greenback after ratings agency Fitch revised Pemex’s credit rating outlook to negative citing uncertainty over the Mexican national oil company’s future business strategy.
Strong earnings boosted shares early on Wall Street but concerns over economic growth in China and Europe lingered, dragging indexes lower in afternoon trade.
“There a lot of cross-currents right now, with Italy, housing weakness, interest rates...” said Michael Antonelli, managing director of institutional sales trading at Robert W. Baird in Milwaukee.
The pan-European STOXX 600 index lost 0.12 per cent and MSCI’s gauge of stocks across the globe shed 0.12 per cent.
The benchmark S&P 500 stock index slipped on Friday as strong earnings from Procter & Gamble Co were offset by ongoing concerns about rising interest rates and geopolitical tensions denting U.S. economic growth.
The Dow Jones Industrial Average rose 64.89 points, or 0.26 per cent, to 25,444.34, the S&P 500 lost 1 point, or 0.04 per cent, to 2,767.78 and the Nasdaq Composite dropped 36.11 points, or 0.48 per cent, to 7,449.03.
Emerging market stocks were flat. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.09 per cent higher.
In currencies, the British pound and the euro rose after Bloomberg News reported that British Prime Minister Theresa May is ready to drop a key Brexit demand in order to make a deal for Britain to leave the European Union.
Earlier, EU negotiator Michel Barnier said a Brexit deal was 90 per cent done although hurdles remained.
Sterling was last trading at $1.3065, up 0.37 per cent on the day. The euro rose 0.49 per cent to $1.1508.
The dollar index fell 0.2 per cent.
The Mexican peso lost 0.66 per cent versus the U.S. dollar at 19.29. It touched a low of 19.34 per dollar, the weakest in five weeks.
The Japanese yen weakened 0.33 per cent versus the greenback at 112.56 per dollar.
Italian assets were sold heavily earlier in the session a day after the European Union called Rome’s draft budget an “unprecedented” breach of EU fiscal rules. The selling subsided after European Economics Commissioner Pierre Moscovici said he wanted to reduce budget tensions with Italy.
The closely watched Italian/German bond yield spread touched a 5-1/2 year high of 338.4 basis points before tightening to 306.8 bps.
Italy’s benchmark 10-year bond yield rose as high as 3.783 per cent, the highest since February 2014. It last traded at 3.569 per cent.
Oil prices rose on signs of surging demand in China, but the market remained concerned over rising U.S. inventories and trade wars that could curb economic activity.
U.S. crude rose 0.77 per cent to $69.18 per barrel and Brent was last at $79.81, up 0.66 per cent on the day.
The benchmark U.S. Treasury yield traded within the previous session’s range. The U.S 10-year note last fell 6/32 in price to yield 3.1958 per cent, from 3.175 per cent late on Thursday.
Reuters