TSX reaches record high while U.S. markets flat ahead of Fed rate decision

BUSINESS

TSX reaches record high while U.S. markets flat ahead of Fed rate decision

Ross Marowits The Canadian Press
Published Tuesday, September 17, 2019 5:17AM EDT Last Updated Tuesday, September 17, 2019 5:25PM EDT

A foreign exchange dealing room in Seoul

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, on Sept. 17, 2019. (Ahn Young-joon / AP)

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TORONTO -- Canada's main stock index set record highs Tuesday while U.S. markets were relatively flat ahead of an interest rate decision by the Federal Reserve.

The S&P/TSX composite index closed up 83.44 points to 16,834.75. That's a record closing level after earlier reaching a record intraday peak of 16,855.45.

The gains were driven by a broad-based rally led by the materials sector as shares of Barrick Gold Corp. and Kinross Gold Corp. each gained more than five per cent.

The December gold contract was up US$1.90 at US$1,513.40 an ounce and the December copper contract was down 1.35 cents at US$2.63 a pound.

Energy was one of three sectors to fall as stocks retreated from Monday's surge in crude oil prices caused by an attack on Saudi Arabia's oil facilities.

Encana Corp. shares lost 6.5 per cent, followed by Crescent Point Energy Corp. at 3.5 per cent.

The October crude contract was down US$3.56 at US$59.34 per barrel and the October natural gas contract was down 1.3 cents at US$2.67 per mmBTU.

Despite the decrease, oil prices were still at the highest level in two months.

"The longer term issue is will there be a risk premium embedded in the price going forward, at least for some period of time just because of the attacks that happened in the Middle East," said Anish Chopra, managing director with Portfolio Management Corp.

The health care sector was also weaker as CannTrust Holdings Inc. lost 14.6 per cent after announcing that it received a notice of licence suspension from Health Canada, which has been investigating the cannabis company for allegedly cultivating pot in unlicensed rooms.

In New York, the Dow Jones industrial average was up 33.98 points at 27,110.80. The S&P 500 index was up 7.73 points at 3,005.69, while the Nasdaq composite was up 32.47 points at 8,186.02.

Chopra said investors were taking a wait-and-see approach pending the U.S. central bank's interest rate decision Wednesday. While rates are largely expected to be cut by another 25 basis points, investors will be examining the Fed's language for any hint of future rate cuts because of data pointing to a still healthy U.S. economy.

"There is a growing view that it's uncertain what they would do after tomorrow," he said in an interview.

The Canadian dollar traded for an average of 75.43 cents US compared with an average of 75.48 cents US on Monday.

It fell largely because of the dip in oil prices and also disappointing manufacturing sales in July.

Statistics Canada said sales fell 1.3 per cent to $57.2 billion in July as sales were down in 11 industries, representing 66.8 per cent of total manufacturing sales. Economists had expected a decline of 0.2 per cent, according to financial markets data firm Refinitiv.

Companies in this story: (TSX:ABX, TSX:K, TSX:ECA, TSX:CPG, TSX:TRST, TSX:GSPTSE, TSX:CADUSD