TORONTO (CP) — The Toronto stock market and the loonie both closed slightly higher Tuesday as investors mulled Justin Trudeau’s majority win in Monday’s federal election.
The S&P/TSX composite index was up 83.54 points at 13,841.92, outperforming its American counterparts, which all closed slightly in the red.
Meanwhile, the loonie rose against the American greenback, up 0.22 of a U.S. cent to 77.03 cents US.
Colin Cieszynski, chief market strategist at CMC Markets Canada, said investors were reacting positively to news that the Liberals won an unexpected majority.
“You’re not going to be worrying about them getting knocked out and having to have an election again in two years,” Cieszynski said.
In addition to erasing the uncertainty related to the possibility of another election, the government’s majority status also means they won’t have to lean on other parties — notably the NDP — for support, Cieszynski said.
“The NDP isn’t going to hold the hammer or the swing vote in a minority parliament, which could push them (the Liberals) farther to the left,” Cieszynski said.
Martin Pelletier, portfolio manager at TriVest Wealth Counsel, said a majority government is good news for businesses generally because minority governments may have difficulty passing new legislation.
“It’s hard to get things done, and we need to get things done in the energy patch,” he said. “We have infrastructure issues and environmental issues and so we can’t kick that can any longer and international investors want to see some action there.”
The gold sector of the TSX was the biggest gainer, up nearly four per cent, while energy rose 1.4 per cent. Healthcare declined roughly six per cent.
The major U.S. indexes traded within a narrow range Tuesday and finished the day slightly lower as investors looked to individual companies’ earnings reports.
The Dow Jones average of 30 stocks was down 13.43 points at 17,217.11 and the broader S&P 500 futures gave back 2.89 points to 2,030.77, while the Nasdaq retreated 24.50 points to 4,880.97.
“Some companies are doing okay and some aren’t and so that’s kind of leaving the broader markets in a holding pattern,” Cieszynski said.
On commodity markets, the December gold contract was up $4.70 at US$1,177.5 an ounce, the December crude contract was up one cent at US$46.29 a barrel and the November contract for natural gas was up three cents at US$2.48 per thousand cubic feet.
In corporate news, shares of Air Canada (TSX:AC) rose 4.2 per cent, or 45 cents, to $11.12. The airline announced that it has reached a tentative, 10-year deal with the union that represents more than 7,000 of its flight attendants.
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Alexandra Posadzki, The Canadian Press
