Closing Report: TSX ends higher as financial shares gain and loonie weakens
Canada’s main stock index closed higher on Wednesday, driven by strength in the financial and technology sectors.
The Toronto Stock Exchange’s S&P/TSX composite index unofficially closed up 49.94 points, or 0.33 percent, at 15,154.68. Eight of the 10 main sectors on the index were higher.
The Canadian dollar weakened against the greenback, weighed down by more disappointing economic data, this time a larger-than-expected Canadian trade deficit in April.
Currency markets were dominated by euro-centric trading, however, as the common currency rose anew after the European Central Bank kept monetary policy steady. The Canadian dollar fell to a three-month low against the euro.
On the economic front, Canada reported a near-record trade deficit in April, with imports and exports falling alike. In contrast, the U.S. trade gap shrank by the largest amount since early 2009.
Data last week showed the Canadian economy contracted in the first quarter. Although Bank of Canada Governor Stephen Poloz said he expects a pick up in non-energy exports to help the economy regain momentum, Wednesday’s data showed that segment disappointed in April.
“We haven’t seen that recovery in non-energy exports like Poloz and the Bank of Canada would like,” said Scott Smith, senior market analyst at Cambridge Global Payments in Calgary.
The Canadian dollar ended the North American session at 80.30 U.S. cents, weaker than the Bank of Canada’s official close of 80.59 U.S. cents, on Tuesday.
The next catalyst may come on Friday, when both Canada and the United States report employment data for May. The U.S. figures could garner more attention as markets try to gauge when the Federal Reserve will begin raising interest rates.
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