Energy shares lift Toronto stock index as eyes turn to Powell

A jump in energy shares lifted Canada's main stock index on Friday as oil prices surged on worries about supply disruption, while investors globally looked for remarks from US Federal Reserve Chair Jerome Powell for cues on tightening policy.

At 9:35 a.m. ET (1335 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 62.63 points, or 0.31%, at 20,566.78.

Energy stocks climbed 2.1% to a two-week high with US crude prices up 2% as energy companies began shutting production in the Gulf of Mexico ahead of a possible hurricane forecast to hit during the weekend.

Trading in Canadian and US stocks has been subdued this week on fears Powell would hint the Fed was ready to start tapering its massive pandemic-era stimulus amid a steady economic recovery.

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"If we get some type of acknowledgment on if the Fed is backing away from its taper narrative, we could see a sell-off in the bond market (and) that would also be reflected perhaps in commodity prices," said Philip Petursson, chief investment strategist at Manulife Investment Management.

"(However,) we believe commodity prices can continue to trend higher, and that does bode well for the Canadian equity market going forward."

Heavyweight financial stocks were the lone decliners on the TSX, sliding for a second straight day following a promise by the ruling Liberal Party to raise corporate income taxes on financial firms if re-elected.

HIGHLIGHTS

Energy firms Enerplus Corp and Lithium Americas Corp were the top gainers on the TSX, up 5.4% and 4.4%, respectively.

Oil jumps as storm approaches Gulf of Mexico production hub

Gold miners Seabridge Gold and Eldorado Gold led the decliners.

The most heavily traded shares by volume were Great-West LifeCo, Sun Life Financial and Suncor Energy.

The TSX posted six new 52-week highs and no new low.