TORONTO – The Toronto stock market closed higher see how to avoid trading Friday in front of a weekend debt referendum in Greece, while the loonie slid lower amid fears about a recession in Canada.
The S&P/TSX composite index closed up 44.40 points at 14,682.39 after rising almost 148 points the prior two trading days.
But Canada\’s main market was still being down sharply around the week – and virtually flat for that year up to now – thanks to an almost 318-point drop Monday on fears of possible knock-on effects from Greece\’s debt woes.
New York markets were closed Friday for U.S. Independence Day, but not before also investing in a losing week blamed largely on the uncertainty over Greece that produced its biggest single loss of the year on Monday.
\”Uncertainty may be the market\’s nemesis,\” said Philip Petursson, managing director at Manulife Asset Management.
The Dow Jones industrial average finished the week down 216.57 points or 1.2 percent and is in slightly negative territory for that year.
The S&P 500 index and also the Nasdaq were also down more than one per cent on the week, although both are still positive year up to now.
Petursson said he expects that United states markets will rebound in the losses, regardless of whether or not a deal is reached between Greece and it is creditors.
\”North American markets fell in the last couple of weeks in sympathy with what\’s happening in Europe. However ,, one shouldn\’t have almost anything to do with the other,\” he said.
Meanwhile, the loonie continued to drift lower, down 0.09 of the U.S. cent at 79.62 cents amid growing concerns that Canada may be in a recession, largely because of the plunge in oil prices in the last year.
\”I believe that the Canadian economy will continue to face challenges over the next month or two if not couple of quarters, and that is in part likely to be reflected in the TSX,\” Petursson said.
Fears of the recession – defined as two consecutive quarters of contraction in gdp – have raised speculation the Bank of Canada might reduce its trend-setting rate of interest, with negative consequences for the loonie.
On the commodity markets, oil prices continued their recent volitile manner. Around 4 p.m. Friday, the August crude contract was down $1.41 to US$55.52 a barrel, a level last seen in mid-April. The August gold contract was up $4.30 at US$1,167.80 an oz.
Among investors, all eyes will be focused on the end result of this Sunday\’s referendum in Greece on whether to accept or reject the austerity measures demanded by creditors in return for bailout loans.
The government of Prime Minister Alexis Tsipras contends a No vote will strengthen its bargaining position in dealing with the country\’s sovereign debt load, which now totals more than 300 billion euros.
Critics say rejection can lead to Greece\’s exit from the euro and maybe the 28-member Eu itself.