TSX gains on financial and industrial sectors
The S&P/TSX Composite Index closed up 81.38 points, or 0.40 per cent, at 20,311.78 on Monday, as gains in the financial and industrial sectors offset losses in the energy and materials sectors. The index hit an intraday high of 20,329.73, surpassing its previous record high of 20,271.51 set on Aug..
The financial sector rose 0.77 per cent, as bank stocks benefited from higher bond yields and expectations of strong earnings. The Bank of Nova Scotia, the Bank of Montreal, and the Royal Bank of Canada all gained more than one per cent. The industrial sector also advanced 0.77 per cent, led by Canadian National Railway Co., which rose 1.64 per cent after announcing a new agreement with Kansas City Southern to acquire the U.S. railroad for US$30 billion.
TSX lags behind U.S. markets on energy and materials weakness
The TSX underperformed the U.S. markets, which reached new highs on Monday amid optimism over the economic recovery and the approval of Pfizer Inc.’s COVID-19 vaccine by the U.S. Food and Drug Administration. The Dow Jones Industrial Average rose 215.63 points, or 0.61 per cent, to 35,335.71. The S&P 500 Index climbed 37.86 points, or 0.85 per cent, to 4,479.53, while the Nasdaq Composite jumped 227.99 points, or 1.55 per cent, to 14,942.65.
The TSX was weighed down by the energy and materials sectors, which fell 1.13 per cent and 0.66 per cent, respectively. The energy sector was dragged lower by a drop in oil prices, as concerns over the spread of the Delta variant and the potential impact on fuel demand overshadowed signs of tight supply. The September crude oil contract was down US$2.30 at US$65.64 per barrel. The materials sector was also pressured by lower gold and copper prices, as the U.S. dollar strengthened and investors shifted to riskier assets. The December gold contract was down US$5.60 at US$1,808.50 an ounce and the September copper contract was down 2.5 cents at US$4.23 a pound.
TSX sees boost from battery and electric vehicle stocks
One of the bright spots on the TSX was the battery and electric vehicle sector, which surged on Monday after a report that the Canadian government is considering a ban on the sale of new gasoline-powered cars by 2035. The report, which cited unnamed sources, said that the government is expected to announce the plan ahead of the federal election on Sept. 20.
The news boosted the shares of companies that are involved in the production and supply of batteries and electric vehicles, such as Lithium Americas Corp., Nano One Materials Corp., and Electrameccanica Vehicles Corp. Lithium Americas, which is developing a lithium mine in Nevada, soared 14.62 per cent to $25.86. Nano One, which is developing a technology to improve the performance and cost of lithium-ion batteries, jumped 12.50 per cent to $4.50. Electrameccanica, which makes a single-seat electric vehicle, rose 10.53 per cent to $3.79.
