(Reuters) – Canada’s main stock index rebounded on Tuesday, following Friday’s sharp decline due to renewed U.S.-China tensions that triggered profit-taking across the market.
At 10:02 ET (1402 GMT), Toronto’s S&P/TSX composite index (.GSPTSE), opens new tab was up 1.2% at 30,220.56 points, as investors returned to trading following Canada’s Thanksgiving holiday on Monday.
The benchmark index posted its steepest drop in six months on Friday after U.S. President Donald Trump issued a series of threats against China in response to Beijing’s tightening of rare earth export restrictions.
However, market sentiment improved slightly after Trump adopted a more conciliatory tone over the weekend.
Despite this moderation in rhetoric, both countries implemented additional port fees on Tuesday on shipping companies transporting goods ranging from consumer products to crude oil.
“We are going to go through a small period of volatility because people haven’t figured out exactly where the U.S. and China are going to settle out on in terms of a trade dispute,” said Jay Bala, CEO and senior portfolio manager at AIP Asset Management.
On Tuesday, 12 out 13 major sectors were higher on the TSX. Materials (.GSPTTMT), opens new tab led the rise, gaining 3.5% as gold prices jumped to a record high above $4,100 on safe-haven demand.
“Over the next 12 months or so, mining is going to do well in Canada because a big part of the U.S.-China trade dispute involves rare earth materials,” Bala said.
“Canadian listed mining companies touch nearly every mine on the planet through engineers, miners, and financing and I think there will be greater exploration for rare earths.”
Communication stocks (.GSPTTTS), opens new tab were the only laggards, falling 0.3%.
Among individual stocks, Orla Mining (OLA.TO), opens new tab jumped 15.4% to a record high after lifting annual consolidated production outlook to 285,000 ounces of gold from 265,000 ounces earlier.
