S&P/TSX composite has best day of year to close volatile January

TORONTO –

Canada’s main stock index had its best day of the year to end a volatile January that saw strength of the energy sector provide insulation from the punishing impact of a weaker tech sector.

“If we loop in Friday of last week as well, this is a strong finish to a very weak month,” said Craig Fehr, investment strategist, Edward Jones.

The S&P/TSX composite index gained 356.54 points or 1.7 per cent to 21,098.29 on Monday, after adding nearly 200 points to end trading last week.

In New York, the Dow Jones industrial average was up 406.39 points at 35,131.86. The S&P 500 index was up 83.70 points at 4,515.55, while the Nasdaq composite was up 469.31 points or 3.4 per cent at 14,239.88.

The TSX lost just 0.6 per cent in January, outperforming U.S. markets thanks largely to the strength of the energy sector which was helped by crude oil prices climbing 17 per cent for the month.

Meanwhile, the Dow was down 3.3 per cent for the month, the S&P 500 was off 5.3 per cent and the tech-heavy Nasdaq was 9.0 per cent lower to end the month.

The technology sector has dragged equity markets in both directions. It was the clear leader for much of 2021 and was largely responsible for moving markets lower in recent weeks.

On Monday, the tech sector gained 5.1 per cent to lead the TSX with shares of e-commerce companies Lightspeed Commerce Inc. and Shopify Inc. increasing 11.8 and 10.1 per cent, respectively.

Ottawa-based Shopify lost nearly 30 per cent in January and is 45 per cent off its all-time high while Montreal-based Lightspeed is down 19 per cent for the month and 75 per cent below its peak.

The weak start to the year for North American stock markets isn’t a reflection for how the year with turn out, Fehr said.

“When all is said and done in 2022. I still think we’ll see equities eke out a gain,” he said, pointing to a mid to upper single digit increase.

Health care climbed 4.9 per cent with cannabis producer Canopy Growth Corp. up 10.1 per cent.

Consumer discretionary, materials, financials and energy were among 10 of the 11 sectors that were up on the day.

The consumer sector rose 2.2 per cent, while materials was up 1.9 per cent as gold prices rose.

The April gold contract was up US$9.80 at US$1,796.40 an ounce and the March copper contract was up 1.5 cents at US$4.32 a pound.

Energy was helped by crude oil prices rising to the highest level since 2014 with Arc Resources Ltd. up 5.4 per cent and Tamarack Valley Energy Ltd. 4.2 per cent higher.

The March crude contract was up US$1.33 at US$88.15 per barrel and the March natural gas contract was up 23.5 cents at US$4.87 per mmBTU.

The Canadian dollar traded for 78.62 cents US compared with 78.30 cents US on Friday.

This report by The Canadian Press was first published Jan. 31, 2022.