S&P/TSX composite index hits record closing high

A broad-based rally pushed Canada's main stock index to close at a record high Wednesday, while the loonie dipped and U.S. markets were mixed.

The S&P/TSX composite index closed up 104.42 points at 16,420.95, topping its previous record of 16,412.94 set January 4, 2018.

The index also set an intra-day record, trading as high as 16,444.45 to eclipse the 16,421.42 point high from Jan. 4.

The Toronto market, which has seen fairly steady gains since late March, has been boosted especially by an oil price rally that has lifted the energy sector that makes up almost 20 per cent of the index, said Michael Currie, vice-president and senior investment advisor at TD Wealth.

Growth stocks such as Shopify Inc., Canopy Growth Corp., Valeant Pharmaceuticals International, all up 25 per cent or more, have also contributed, said Currie.

"They're generally more the growth names. You're not seeing the big dividend, safety, value-type names, they've been holding back a bit."

Cannabis stocks in particular saw a boost Wednesday, after Prime Minister Justin Trudeau said Canadians would be able to legally buy and smoke marijuana starting Oct. 17. Canopy was up more than six per cent, while Aphria Inc. and Aurora Cannabis Inc. were up more than four per cent.

Canadian stocks have also been boosted lately from the dropping loonie, which is down almost two cents in the past week, said Currie.

"One of the at least positive effects is it makes Canadian stocks more appealing to foreign investors, because they're by definition cheaper."

The loonie has faced pressure from trade concerns over NAFTA negotiations, but its fall more attributable to increased favour for the U.S. dollar as the Federal Reserve raises rates amid a strong economy.

"It's not so much a case that people are anti the Canadian dollar, just there's a very, very strong move into U.S. dollars," said Currie.

On Wednesday, the loonie averaged 75.18 cents US, down 0.14 of a US cent.

The Dow Jones industrial average fell 42.41 points to 24,657.80. The S&P 500 index added 4.73 points to 2,767.32, while the Nasdaq composite index gained 55.92 points to 7,781.51, a record high.

BMO senior economist Robert Kavcic pointed out that while Toronto's benchmark index is up roughly eight per cent in the past year, it is still trailing the 14 per cent gain of the S&P 500. 

"What might be most interesting about the recent run is that it comes against a backdrop of darkening clouds on the trade front, slowing credit growth and a levelling off in oil prices," Kavcic said in a commentary.

In the New York Mercantile Exchange, the gold futures for August closed at $1,274.50 US per ounce, down $4.10.

The August crude contract for West Texas Intermediate closed at $65.71 US per barrel, up 81 cents.