TORONTO — Canada’s main stock index recovered some of Wednesday’s losses as tech darling Shopify Inc. surged after receiving an analyst upgrade.
The Ottawa-based company’s shares gained 5.9 per cent, accounting for about 85 per cent of the TSX’s daily increase.
Shopify shares moved after Royal Bank of Canada put a US$1,000 target price, up from Thursday’s close of US$863.56.
“It continues to be a huge winner,” said Mike Archibald, vice-president and portfolio manager with AGF Investments Inc.
The momentum and interest in this name follows on the positive announcement earlier this week of its partnership with Walmart.
“One of the most clear patterns that we’re seeing in the marketplace is just this continued demand for tech stocks and Shopify is a prime example of that in Canada,” he said.
The S&P/TSX composite index closed up 51.14 points at 15,479.83.
Shopify, Enbridge Inc. and RBC were the big drivers of the market’s Thursday returns.
Besides technology, consumer staples was one of the big winners on the day as strong quarterly results from Empire Company Ltd. drove all grocers higher on increased traffic during the COVID-19 pandemic.
Energy moved off early gains after Iraq announced it would cut an additional 260,000 barrels of crude per day on top of the agreed amount in the agreement with OPEC countries plus Russia last month.
It was also initially helped by a U.S. refiner saying it was increasing capacity at its large Texas refinery, which points to stronger demand for driving.
The August crude contract was up 84 cents at US$39.05 per barrel and the July natural gas contract was unchanged at nearly US$1.64 per mmBTU.
“These are all incrementally positive signs that the economy is starting to reopen a little bit more and to the extent that, that continues to happen it should continue to provide some tailwinds to equity market sentiment,” said Archibald.
Materials was lower on a dip in gold prices as Iamgold Corp. lost four per cent.
The August gold contract was down US$4.50 at US$1,731.10 an ounce and the July copper contract was down 0.15 of a cent at nearly US$2.59 a pound.
The Canadian dollar traded for 73.59 cents US compared with 73.77 cents US on Wednesday.
The loonie was hit as Canada’s wholesale trade plunged a record 21.6 per cent in April as the pandemic shut businesses across the country.
A Bank of Canada senior official also suggested Thursday that the country is on the path to recovery but it’s going to be very gradual.
In New York, the Dow Jones industrial average was down 39.51 points at 26,080.10. The S&P 500 index was up 1.85 points at 3,115.34, while the Nasdaq composite was up 32.52 points at 9,943.05.
In addition to concerns about rising coronavirus infections in several states, weekly jobless numbers were weaker than expected.
They dropped for an 11th straight week, reaching 1.51 million. The number of workers who continued to get unemployment benefits also decreased to 20.5 million.
But analysts had expected lower numbers, “raising questions about the strength of the reopening recovery and perhaps recognition that political, societal and economic turmoil has had more lasting effects,” Colin Cieszynski, chief market strategist for SIA Wealth Management, wrote in a note to clients.
There was positive news, however, from some smaller surveys, said Archibald.
“So it does appear as though we are turning the corner on the economic reopening and so to that extent I think that should help over time push more money back into the stock market, which obviously is happening today in Canada.”
This report by The Canadian Press was first published June 18, 2020
Companies in this story: (TSX:IMG, TSX:EMP.A, TSX:SHOP, TSX:ENB, TSX:RY, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press