Strong TSX Performance Boosted by Energy Sector Gains

The Toronto Stock Exchange (TSX) started the new month on a positive note, driven by better-than-expected U.S. job openings and manufacturing data. The index climbed by 34 points on Tuesday, reaching an all-time high of 24,034 on a closing basis. Despite some weakness in technology and industrial stocks during the day, strong performances in the mining sector and oil companies helped lift the TSX benchmark.

Canadian energy companies performed particularly well, with Canadian Natural Resources, Baytex Energy, Imperial Oil, and Veren among the top gainers, each rising by at least 4.2%. MEG Energy also saw its shares increase by 3.8% to $26.37 per share, building on its year-to-date gains which now stand at 11.4%. This surge followed the company’s announcement of successfully meeting its US$600 million debt reduction target and its commitment to return 100% of its free cash flow to shareholders.

MEG’s announcement included plans to expand share buybacks and introduce a quarterly base dividend of $0.10 per share starting in October 2024, with the first payment scheduled for October 15, 2024. MEG Energy’s statement highlighted this development as a significant milestone in its multi-year capital allocation strategy, positively received by the market.

Conversely, BlackBerry, Tilray, Aritzia, and Celestica were the worst performers, each declining by at least 3.1%. The day’s trade volume data indicated TD Bank, Canadian Natural Resources, Bank of Nova Scotia, Power Corporation of Canada, and TC Energy as the most actively traded stocks.

In commodity markets, crude oil, natural gas, and copper prices showed further upward momentum on Wednesday morning, potentially benefiting the resource-heavy sectors on the TSX. While no major domestic economic releases are scheduled, Canadian investors are advised to monitor U.S. non-farm employment and weekly crude oil stockpile data. Additionally, the ongoing conflict in the Middle East remains a critical factor as it could affect global oil supply and drive commodity prices higher.

On the corporate front, NovaGold Resources, listed on the TSX, is expected to announce its latest quarterly financial results after the markets close on October 2.