Canada’s main stock index was flat on Tuesday, as gains in energy shares offset weakness in other sectors due to investor worries that the Iran-Israel conflict could spiral into broader regional unrest.
The S&P/TSX composite index was down 0.04% at 26557.54 points. The commodity-heavy benchmark index had briefly hit a record high on Monday as investors hoped that the Middle East tensions would be contained.
However, the hope was short-lived as the tensions showed no signs of easing. The conflict entered its fifth day on Tuesday, driving oil prices higher even though major oil and gas infrastructure and flows have so far been spared from substantial impact.
“If anything, it (the conflict) could lead oil prices higher, but both Canada and U.S. are big oil producers, so it might actually end up benefiting us in the long term,” said Jay Bala, co-founder and senior portfolio manager at AIP Asset Management.
TSX hits new record high as investors shrug off Middle East concerns
Energy stocks were leading the gains on TSX, tracking the rising crude prices.
U.S. President Donald Trump said he wanted a “real end” to the nuclear problem with Iran after departing early from the Group of Seven summit in Canada, while clarifying he was not leaving to work on a ceasefire.
Investors also welcomed the possibility of Canada getting closer to a deal with the U.S. after Prime Minister Mark Carney said he and Trump had agreed that their nations should try to wrap up a new economic and security deal within 30 days. Information and technology stocks also rose 0.2%.
On the flip side, industrials weighed most on TSX with a 0.6% decline.
Healthcare sector was down over 1% with Tilray Brands dropping 6% to the bottom of the benchmark index.
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