TORONTO — A sharp drop in the price of oil wasn’t enough to offset broad gains on the Toronto stock index Monday, as the loonie hit its lowest level in more than a month.
The S&P/TSX composite index advanced 70.06 points to 15,705.00, despite some drag from the energy sector as the November crude contract fell $1.09 to US$50.58 per barrel.
Oil prices dropped after oilfield services company Baker Hughes said last Friday that more drilling rigs went into operation last week after two weeks of declines, and Reuters reported that output of OPEC nations grew in September. Both of those reports suggest that oil supplies are rising, which sends prices lower.
“By and large it was another good day for equity markets at home and around the world,” said Craig Fehr, a Canadian markets strategist with Edward Jones in St. Louis. “It continues to be driven by the broader economic data which continues to come in fairly positive.”
South of the border, Wall Street indices logged record highs.
The Dow Jones industrial average climbed 152.51 points to 22,557.60, the S&P 500 index was up 9.76 points to 2,529.12 and the Nasdaq composite index advanced 20.76 points to 6,516.72.
In currency markets, the Canadian dollar continued to weaken against the greenback, trading at an average price of 79.97 cents US, down 0.16 of a cent.
The last time the loonie traded below 80 cents was on Aug. 31 when it closed at $79.77 US.
Two rate hikes over the summer by the Bank of Canada following the economy’s surprisingly powerful start to the year had seen the loonie approaching 83 cents US in September.
“I think that the reaction with the loonie, both based on monetary policy actions from the Bank of Canada and from recent strong growth in the economy, was that it kind of overshot and priced in rosier expectations than I think were likely,” said Fehr.
Last Friday, Statistics Canada reported that the country’s eight-month march of monthly growth in the economy came to an end in July when gross domestic product was essentially unchanged at zero per cent growth compared with June.
A speech last Wednesday by Bank of Canada governor Stephen Poloz also suggested a more cautionary tone to the bank’s approach going forward when he said he had no prearranged route for further interest-rate hikes.
Elsewhere in commodities, the November natural gas contract was down nine cents at US$2.92 per mmBTU, the December gold contract fell $9.00 to US$1,275.80 an ounce and the December copper contract was unchanged at US$2.96 a pound.
Follow @DaveHTO on Twitter.
David Hodges, The Canadian Press