By Fergal Smith
Canada's main stock index rose on Thursday as U.S. jobs data lowered expectations for Federal Reserve interest rate hikes, with gains for metal mining shares offsetting declines for financials and auto parts suppliers.
The Toronto Stock Exchange's S&P/TSX Composite Index TSX:TSX ended up 109.68 points, or 0.3%, at 34,966.67 on the first day of trading for the third quarter. The market was closed on Wednesday for Canada Day.
U.S. job growth slowed sharply in June and payroll gains for the prior two months were revised lower, pointing to a cooling labor market.
"The weaker labor data has helped ease concerns around potential U.S. interest rate hikes," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
The price of gold TVC:GOLD increased 2.2% as the U.S. dollar TVC:DXY lost ground against a basket of major currencies. The materials group TSX:TTMT, which includes metal mining shares, was up 2.5%.
Energy TSX:TTEN added 0.5% as the price of U.S. oil NYMEX:CL1! settled 0.2% higher at $68.69 a barrel.
British Columbia announced a deal with Canada's federal government that maintains the federal ban on oil tankers along the province's north coast, but appears to open the door to neighboring Alberta's proposal for a new crude oil pipeline if a different route is proposed.
Consumer discretionary (.GSPTTCD) ended 0.7% lower, with shares of autoparts supplier Magna International TSX:MG down 4.8%.
The Trump administration on Wednesday declined to extend the U.S.-Mexico-Canada Agreement, starting a decade-long clock to wind down the trade deal as it seeks changes to try to reshore manufacturing jobs and reduce U.S. trade deficits with its North American neighbors.
Heavily weighted financials (.SPTTFS) lost 0.5%, giving back some recent gains. The sector was up nearly 25% in the second quarter.
Domestic data showed that the manufacturing sector expanded further in June as production and employment rose, but intensifying supply shortages helped lift cost inflation to a near four-year high.