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Toronto market snaps weekly losing streak as investors buy the dip

By Fergal Smith

TORONTO (Reuters) – Canada’s main stock index was nearly unchanged on Friday, hanging on to its weekly advance as investors eyed the approach of a seasonally stronger period for the market and after a surge in domestic jobs signaled a strong economic recovery.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 0.10 of a point at 20,416.31, its highest closing level since Sept. 27. It was up 1.3% for the week after four straight weeks of losses.

“Guys are buying the dip which has been the thing to do for the last while,” said Steve Palmer, chief investment officer at AlphaNorth Asset Management.

“We are approaching a seasonally strong period for equities,” Palmer said. “Once we get out of the September-October period, things are going to resume the uptrend.”

The Toronto market has gained 17.1% so far this year, helped by hopes of economic recovery. Those hopes were lifted on Friday by data showing the Canadian economy posted a monster gain of 157,000 jobs in September, pushing employment back to its pre-pandemic levels.

The S&P 500 ended slightly lower after data showed weaker jobs growth than expected in September, yet investors still expected the Federal Reserve to begin tapering asset purchases this year.

Adding to support for the TSX this year has been a rally in oil prices. U.S. crude oil futures settled 1.3% higher at $79.35 a barrel on Friday, while energy shares climbed 1.8% to their highest level since May 2019.

Heavily-weighted financials advanced 0.6%, while technology ended nearly 2% lower.

One of the biggest decliners was Dye & Durham Ltd. It lost 5.8% after the company said it would not opt for any strategic changes including a sale, putting an end to the software maker’s strategic review started in response to a management-led buyout offer.

(Reporting by Fergal Smith; Additional reporting by Shashank Nayar in Bengaluru; Editing by Sonya Hepinstall)

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