TORONTO (Reuters) - Canada’s main stock index climbed on Wednesday after concerns about Western military action against Syria drove oil prices to a six-month high and lifted shares of energy producers, but gains were capped as those same worries weighed on other sectors.
As Western powers said their minds were made up and that President Bashar al-Assad must face retribution for using banned weapons against his people, U.S. officials sketched out plans for multi-national air strikes on Syria that could last for days.
Apprehension that the U.S. Federal Reserve will soon begin easing off its monetary stimulus measures also played on the minds of investors.
With tensions in Syria growing, the price of oil hit a six-month high as investors feared any escalation of conflict would create supply problems. <GOL/> <O/R>
“We are pulling excuses out of the hat to figure out why markets should be jittery,” said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.
He does not anticipate any supply troubles, noting that Syria is not a major producer of oil.
“If you’re a long-term investor and have the ability to withstand the stomach-churning moves, it’s an excellent time to buy good quality Canadian energy companies,” Schwartz added.
Shares of energy companies jumped 1.5 percent.
Canadian Natural Resources Ltd (CNQ.TO) jumped 3.8 percent to C$32.95, and had the biggest positive influence on the market. Cenovus Energy Inc (CVE.TO) added 2.7 percent to C$30.86 and Suncor Energy Inc (SU.TO) rose 1 percent to C$36.47.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 16.01 points, or 0.13 percent, at 12,607.22, recovering from its biggest drop in more than two months in the previous session.
Six of the 10 main sectors on the index declined.
The materials sector, which includes mining stocks, lost 1.6 percent, hurt by a 2.5 percent drop in shares of gold producers.
In company news, National Bank of Canada’s (NA.TO) third-quarter profit grew almost 11 percent, as an increase in trading activity boosted earnings from its financial markets division. The stock added 2.4 percent to C$81.14.
Bombardier Inc (BBDb.TO) signed a preliminary deal to sell 50 of its Q400 NextGen aircraft to Russian industrial and defense conglomerate Rostec as part of a broader agreement that will lead to a final assembly line for the planes in Russia. Bombardier shares rose 2.6 percent to C$4.69.