TSX falls as higher bond yields offset energy rally

TSX falls as higher bond yields offset energy rally

TORONTO, Dec 1 Canada's main stock index rose on Thursday as energy shares made further gains with oil prices after OPEC reached a deal to cut output, while investors reacted to divergent earnings reports from two major banks.

January crude contracts rose $1.62 to US$51.06 a barrel, the highest it's been since mid-October.

In stock markets, the commodity-heavy S&P/TSX composite index in Toronto rallied 95.18 points at 15,094.99 in mid-afternoon trading, with the energy sector recording the largest rise, surging by more than eight per cent.

The Organization of the Petroleum Exporting Countries announced the group has arrived at a consensus that will see its 14 members scale back a total of 1.2 million barrels a day starting in the near year.

Still, foreign exchange strategists forecast that the Canadian dollar will extend recent losses against its US counterpart over the coming months as expected monetary policy divergence with the United States overshadows higher oil prices, a Reuters poll found.

Non-OPEC nations, including Russian Federation, were expected to also pare an additional 600,000 barrels a day off their production.

Federal government approves Kinder Morgan Trans Mountain pipeline
Federal government approves Kinder Morgan Trans Mountain pipeline

A glut in supply has led to sinking oil prices over the past few years, as countries such as Iran and Saudi Arabia regularly pumped out record amounts.

The price of oil has fallen sharply since mid-2014, when it was over US$100 a barrel, dropping below US$30 at the start of this year.

"There's been a lot of talk about OPEC being dead, OPEC being meaningless, OPEC no longer a player in the global market because they couldn't get along and agree to their own (output) numbers", Currie said. December copper contracts were down seven cents at US$2.59 a pound.

The Canadian dollar was at 75.01 cents USA, up 0.54 of a USA cent from Thursday's close.

In New York, the Dow Jones industrial average advanced 19.72 points to 19,141.32, while the S&P 500 lost 3.65 points to 2,201.01.