TSX Pares Early Gains, Settles Modestly Higher

(RTTNews) - After a fairly buoyant start, the Canadian stock market retreated and pared much of its gains on Monday as stocks, with the exception of those in the energy sector, drifted lower due to lack of support.

The initial buoyancy in the market was thanks largely to the news that the U.S. and Canada reached an agreement on a framework North American Free Trade Agreement deal, just before the deadline of midnight of September 30.

The new deal called the United States-Mexico-Canada Agreement would permit more U.S. access to Canada's dairy market and restricts its car exports to Washington.

"It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home," said US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland in a joint statement.

Financial and healthcare stocks were among the early gainers. However, the market retreated and pared substantial portion of its early gains. Despite edging off the day's lows swiftly, the market faltered again, stayed sluggish till the end and finally settled modestly higher, riding on gains in energy stocks.

The benchmark S&P/TSX Composite Index ended up 31.29 points, or 0.19%, at 16,104.43, after scaling a high of 16,193.06 and a low of 16,069.66 intraday. On Friday, the Index ended down 131.48 points, or 0.81%, at 16,073.14.

The Capped Energy Index gained more than 2%. Suncor Energy (SU.TO), Canadian Natural Resources (CNQ.TO), Encana Corporation (ECA.TO), Cenovus Energy Inc. (CVE.TO), Imperial Oil (IMO.TO) and PrairieSky Royalty (PSK.TO) gained 1.9% to 3%. Tourmaline Oil Corp. (TOU.TO) and ARC Resources (ARX.TO) ended higher by 1.2% and

1.05%, respectively. Baytex Energy (BTE.TO) added 4.5%, Athabasca Oil Corporation (ATH.TO) ended higher by about 10%, Crew Energy (CR.TO) climbed up 5.85%, Crescent Point Energy Corp. (CPG.TO) advanced by nearly 3% and Enbridge Inc. (ENB.TO) gained nearly 2%.

Husky Energy Inc. (HSE.TO) has proposed to buy MEG Energy Corp. (MEG.TO) for a total equity consideration of

about $3.3 billion. That values MEG at enterprise value of $6.4 billion, including the assumption of about $3.1 billion of debt. The transaction will be accretive to Husky's free cash flow, funds from operations, earnings and production on a per share basis. Husky Energy shares ended more than 6% down, while MEG Energy Corp. ended with a hefty gain of nearly 38%.

The Capped Healthcare Index climbed up 1.22%. Bausch Health Companies Inc. (BHC.TO) jumped 5.5%, after the company's subsidiary Salix Pharmaceuticals issued a statement regarding the successful resolution of the legacy investigation with the Securities and Exchange Commission.

In the banking space, Bank of Nova Scotia (BNS.TO) declined by about 1%. Canadian Imperial Bank of Commerce (CM.TO) ended modestly higher, while other bank stocks ended flat.

Materials stocks turned in a mixed performance. Teck Resources (TECK.B.TO) gained 2.5%, while Wheaton Precious Metals Corp. (WPM.TO) declined by 2.7%, CCL Industries Inc. (CCL.B.TO) ended nearly 2% down.

Bombardier Inc. shares gained about 1.5% after Bombardier Transportation announced that its Chinese joint venture, Bombardier Sifang (Qingdao) Transportation Ltd., has secured a contract from China Railway Corp. to supply 120 CR400AF new Chinese standard high-speed train cars. The total contract is valued at approximately 2.2 billion CNY or $324 million.

Asian stocks ended mixed on Monday as trade worries persisted and investors digested weak data from China and Japan.

European stocks ended mostly higher amid easing trade concerns after the U.S. and Canada reached an agreement on a framework North American Free Trade Agreement deal.

In economic releases from Europe, Eurozone manufacturing activity grew at the weakest pace in two years in September, final data from IHS Markit showed.

The euro area jobless rate fell to 8.1% in August from 8.2% in July, Eurostat reported. This was the lowest since November 2008.

German retail sales grew by real 1.6% year-on-year in August, faster than the 0.9% expansion seen a month ago, figures from Destatis showed. The annual rate came in line with expectations.

The U.K. manufacturing sector expanded at a faster pace in September, survey data from IHS Markit and Chartered Institute of Procurement & Supply showed.

In the U.S. market, stocks pared gains after buoyant start and ended mixed. The initial strength on Wall Street came amid easing trade concerns after U.S. and Canadian officials agreed on a trade deal to replace the North American Free Trade Agreement shortly before a midnight deadline.

In commodities, crude oil futures for November ended up $2,05, or 2.8%, at $75.30 a barrel, the highest settlement since November 2014, amid rising concerns about possible supply shortage post sanctions on Iranian oil from November.

Gold futures for December ended down $4.50, or 0.4%, at $1,191.70 an ounce.

Silver futures for December ended at $14.507 an ounce, down $0.205 for the session, while copper futures for December settled at $2.7875 per pound, down $0.0175 from previous close.