TORONTO (Reuters) - Canada’s main stock index broke a seven-day slump on Tuesday as investors picked through earnings reports for glimmers of hope and resource stocks bounced off recent lows.
The energy sector has lost more than a quarter of its value since a peak in mid-April. It rose 2 percent on the day, as oil prices stabilized after a four-day slide. [O/R]
Still, enthusiasm was in short supply.
“I don’t think funds are aggressively buying or selling here,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. “It’s hard to get a sense of direction. Because we’ve come down a fair bit a lot of the bad news is priced into these stocks, the energy and the mining companies.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 75.99 points, or 0.54 percent, at 14,077.36. It is down more than 5 percent in the past month.
“The trend still appears to be more on the downside,” Nakamoto said.
BlackBerry Ltd (BB.TO) gained 6 percent to C$10.07 after Morgan Stanley upgraded the stock of the smartphone pioneer.
The Chinese equities rout of the past week has exposed resource companies to the prospect of diminishing demand from the world’s second largest economy.
“Weaker economic numbers out of China and other emerging market countries don’t portend well for the commodity complex, which is what Canada is based on,” said Manash Goswami, a portfolio manager at First Asset Investment Management.
Goswami said quarterly corporate earnings have so far been adequate but not outstanding.
“Companies are cost-cutting and they are managing their way through this, but we haven’t seen robust top-line growth,” he said.
Shares in WestJet Airlines Ltd (WJA.TO) fell 3.7 percent to C$21.83 even though the company reported a 19 percent rise in profit, helped by lower fuel costs and new routes.
Home Capital Group Inc (HCG.TO) fell 6.4 percent to C$27.30. The alternative lender said after the close on Monday that board member James Baille, a former chairman of the Ontario Securities Commission, had resigned.
First Quantum Minerals Ltd (FM.TO) lost 4.3 percent to C$11.06. Production at its Zambian mines was hit by power cuts.
Reporting by Alastair Sharp; Editing by Peter Galloway and David Gregorio