Canadian GDP gains but Russian oil surge hits TSX
Gold miners saw their value tumble Thursday as the greenback was boosted by rising expectation of a Fed interest rate hike, and gold prices slipped.
For a while in morning trade, the main TSX index remained buoyant despite the lower gold price as Statistics Canada revealed an annualised rate of GDP growth of 2.6 per cent, smashing all expectations.
However, the session worsened for commodities as non-OPEC member Russia was reported to have kept oil output steady in February, rather than scaling it back. Oil prices dropped more than 2 per cent.
Materials and energy groups of the main TSX index slumped 4.3 and 1.4 per cent respectively and four other groups, including financials, also lost.
Wall Street also closed lower, coming down from record highs despite the scramble for Snap’s IPO stock. European and Asian markets closed mixed.
The S&P/TSX Composite Index closed down 63.03 (0.40 per cent)
The Dow Jones closed down 112.6 (0.53 per cent)
Oil is trending lower (Brent $55.06, WTI $52.61 at 4.30pm)
Gold is trending lower (1235.20 at 4.30pm)
The loonie is valued at U$0.7464
Household spending drove fourth quarter GDP
Canada’s economy grew 2.6 per cent on an annualised basis in the fourth quarter, far higher than even the optimistic 2 per cent forecasts of some analysts and the 1.5 per cent expected by the Bank of Canada.
Statistics Canada’s data shows that household spending continued to be the largest contributor to GDP with a 0.6 per cent increase, slightly off the 0.7 per cent of the third quarter.
Household spent 0.9 per cent more on goods and 0.4 per cent more on services. Spending on financial services including mutual funds and stock and bond commissions were up 1.6 per cent.
Vancouver home sales slump
There was a 41.9 per cent slump in home sales in the Greater Vancouver area in February compared to a year earlier but there was a gain of 59.2 per cent from January.
The Greater Vancouver Real Estate Board says that the 2,425 sales figure was 7.7 per cent below the 10-year average, but that new listings had also slumped to 3,666, down 36.9 per cent from February 2016.
For all home types in Metro Vancouver, the benchmark price was down 2.8 per cent compared to 6 months earlier.