Scotiabank weighs on Toronto stock index as Wall Street cruises to new record high - InfoNews

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Scotiabank weighs on Toronto stock index as Wall Street cruises to new record high

The TMX broadcast centre is pictured in Toronto May 9, 2014. THE CANADIAN PRESS/Darren Calabrese
November 28, 2017 - 2:15 PM

TORONTO - Financials weighed on the Toronto stock index Tuesday after shares of the Bank of Nova Scotia fell amid news it's buying a Chilean bank, as Wall Street reached new milestones.

The S&P/TSX composite index fell 12.48 points to 16,029.64. Scotiabank's stock (TSX:BNS) was down $1.75, or 2.10 per cent, to $81.73 at the closing of markets.

The bank, Canada's third-biggest lender, has submitted a $2.9-billion offer to buy Banco Bilbao Vizcaya Argentaria, S.A.'s interests in its Chilean banking operation, BBVA Chile, and certain subsidiaries. Scotiabank also posted fourth-quarter earnings of $2.07 billion, up from $2.01 billion during the same period last year.

South of the border, U.S. stocks rose sharply to set more record highs on Wall Street, driven by big gains in banks. Bank of America jumped 3.9 per cent Tuesday and JPMorgan Chase rose 3.5 per cent after U.S. Federal Reserve chair nominee Jerome Powell said the Fed would consider easing up on financial regulations.

The Dow Jones industrial average soared 255.93 points to 23,836.71, about 246 points higher than its last record finish on Nov. 21. The S&P 500 index added 25.62 points to 2,627.04 and the Nasdaq composite index was up 33.84 points to 6,912.36.

U.S. investors were also encouraged by news Tuesday that a Senate committee has cleared the way for a tax reform bill to go before the full Senate.

In currency markets, the Canadian dollar was trading at an average price of 78.08 cents US, down 0.44 of a U.S. cent.

"A lot of that has to do with the trade negotiations that are not extremely encouraging with respect to NAFTA and what the impact of that is going to be on trade for Canada," said Craig Jerusalim, portfolio manager of Canadian equities at CIBC Asset Management.

Additionally, he added, differences in interest rate policies between the Fed and the Bank of Canada is also weighing on the loonie.

"It sure seems like the Fed is going to raise rates in December whereas the Bank of Canada is clearly on hold for the time being. So that divergence is going to put some additional pressure on the Canadian dollar," Jerusalim said.

In other Canadian corporate news, shares of Home Capital Group Inc. (TSX:HCG) were up 33 cents, or 2.03 per cent, to $16.59 after the alternative mortgage lender said Tuesday it has received a draft statement of claim from a partnership managed by West Face Capital Inc. containing allegations of misrepresentation. The company said the draft, which has not yet been filed in court, is claiming damages of $70 million.

On the energy front, TransCanada Corp. (TSX:TRP) was up six cents, or 0.09 per cent, to $63.55 following comments by Dean Patry, senior vice-president of liquids, that the company started to engage with Nebraska landowners along the alternate route of its Keystone XL pipeline approved last week.

In commodities news, the January crude contract was down 12 cents to US$57.99 per barrel and the January natural gas contract was up 11 cents to US$3.13 per mmBTU.

The December gold contract was up 50 cents to US$1,294.90 an ounce and the March copper contract was down six cents to US$3.10 a pound.

- With files from The Associated Press.

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News from © The Canadian Press, 2017
The Canadian Press

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