FILE – The Toronto Stock Exchange Broadcast Centre is shown in Toronto on June 28, 2013. THE CANADIAN PRESS/Aaron Vincent Elkaim

FILE – The Toronto Stock Exchange Broadcast Centre is shown in Toronto on June 28, 2013. THE CANADIAN PRESS/Aaron Vincent Elkaim

Toronto stock market soars to near eight-week high on surging energy sector

Stock markets also rose in the U.S. even though its economy slipped into recession

Canada’s main stock index soared to a near eight-week high Wednesday as the energy sector surged despite producers posting big losses as they cut oil production amid low crude prices.

The S&P/TSX composite index closed up 429.82 points at 15,228.11 to the highest closing since March 6.

Stock markets also rose in the U.S. even though its economy slipped into recession and the Federal Reserve pointed to a protracted recovery.

In New York, the Dow Jones industrial average was up 532.31 points at 24,633.86. The S&P 500 index was up 76.12 points at 2,939.51, while the Nasdaq composite was up 306.98 points at 8,914.71.

READ MORE: More than half of Canadian companies seeing sales drop at least 20%: StatCan

“The risk-on mood has extended itself into a third day this week which has added to the impressive comeback that we’ve seen here in April,” said Candice Bangsund, portfolio manager for Fiera Capital.

She said equity climbed on renewed hopes for a viable treatment to fight the novel coronavirus, which helped offset weaker-than-expected GDP results that showed the economy shrank 4.8 per cent in the first quarter.

Gilead Sciences and the U.S. government reported that remdesivir shortened the time it takes for COVID-19 patients to recover by four days on average if taken early.

That’s a different message than last week when a Financial Times report suggested the drug was not successful.

Bangsund said the effectiveness of the drug is by no means a done deal but the market rallied on hopes it’s proven successful.

“The market is pretty optimistic about the potential recovery and the fact that economies are going to be reopened here in May,” she said in an interview.

However, the Fed dampened hope of a V-shaped or quick recovery by warning that the pandemic will weigh on the economy longer than expected.

Bangsund said the central bank’s outlook is consistent with her view that reopenings are going to be staggered and take longer.

She said the weakest economic growth by the United States since the financial crisis should have been viewed negatively but equity markets have been largely unfazed by grim economic and corporate earnings results.

“Markets are really looking through the current economic destruction and towards an eventual global economic comeback.”

READ MORE: March job losses just ‘a tiny snapshot’ of full impact of COVID-19: B.C. professor

The energy sector led a broad-based rally on the TSX, gaining more than 13 per cent with shares of several producers climbing by double digits. Crescent Point Energy Corp. and Shawcor Ltd. each rose 17.5 per cent while MEG Energy Corp. was up 17.2 per cent.

The increases flowed as the price of crude oil surged on a U.S. report that gasoline demand jumped and fourth straight week of declining production. That helped to alleviate concerns about storage availability amid weak demand.

“It’s added to hope for an eventual rebalancing in the market and a decline in that massive supply glut that’s been weighing on markets for the last few months,” she said.

The June crude contract was up US$2.72 or 22 per cent at US$15.06 per barrel and the June natural gas contract was down 7.9 cents at nearly US$1.87 per mmBTU.

Higher crude prices helped the Canadian dollar, which traded for 71.83 cents US compared with an average of 71.54 cents US on Tuesday.

The heavyweight financials sector rose 4.3 per cent and consumer discretionary was up 3.3 per cent.

Only consumer staples was lower.

Materials rose less than a percentage point as gains by forestry companies like West Fraser Timber Co. Ltd. were partially offset by the impact of lower gold prices.

The June gold contract was down US$8.80 at US$1,713.40 an ounce and the July copper contract was up 2.5 cents at US$2.37 a pound.

Despite improved sentiment, Bangsund fears the market could be getting ahead of itself with valuations back to pre-COVID levels.

“Given that there’s still so much uncertainty out there, we think maybe things have gone a little too far too fast and markets could be vulnerable to a near-term correction.”

Ross Marowits, The Canadian Press


Like us on Facebook and follow us on Twitter.

Coronaviruseconomyoil and gas

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Rogers Creek Trail main trailhead is located on the Redford Extension in Port Alberni. (SUSAN QUINN/ Alberni Valley News)
Hiker rescued after cold few hours in the bush outside Port Alberni

Alberni Valley Rescue Squad said they receive frequent calls for people lost on this trail

Helma Swinkels, left, from Bibi J’s is all smiles as she makes her first donation under the new business name to Ellen Frood from Alberni Community and Women’s Services (ACAWS). In 18 sales days, Swinkels was able to donate $3,000 to the transition house. (SUSAN QUINN/ Alberni Valley News)
Bibi J’s in Port Alberni makes first donation to non-profit

Alberni Women and Community Services to benefit

Alberta premier Jason Kenney announced that Red Deer and other rural locations would soon be getting doses of the COVID-19 vaccine. (photography by Paul Taillon/Office of the Premier)
EDITORIAL: Leading by example

Those in leadership roles need to follow the restrictions they impose on others

Melissa Martin from the Rollin Art Centre holds two paintings from the Rollin Art Centre’s permanent collection: an original portrait painted by the late Robert Aller, and a mixed media piece called ‘House’ from Peggy Larson that was part of Aller’s private collection. (SUSAN QUINN/ Alberni Valley News)
ARTS AROUND: Rollin Art Centre to re-open February 2

Newest exhibit will feature some pieces from permanent collection

Rik Abel has opened Rik’s Picks, a vintage record shop on Johnston Road. (TERESA BIRD / ALBERNI VALLEY NEWS)
BIZ BEAT: Port Alberni businesses get innovative during pandemic

See what’s new in the Port Alberni business community

Maj.-Gen. Dany Fortin, vice-president of logistics and operations at the Public Health Agency of Canada, speaks at a news conference on the COVID-19 pandemic in Ottawa, on Friday, Jan. 15, 2021. THE CANADIAN PRESS/Justin Tang
B.C. records 500 new COVID-19 cases Wednesday, 14 deaths

Outbreak at Surrey Pretrial jail, two more in health care

Vancouver Canucks’ Travis Hamonic grabs Montreal Canadiens’ Josh Anderson by the face during first period NHL action in Vancouver, Wednesday, Jan. 20, 2021. THE CANADIAN PRESS/Jonathan Hayward
Horvat scores winner as Canucks dump Habs 6-5 in shootout thriller

Vancouver and Montreal clash again Thursday night

A suspect has been arrested in connection with fires at Drinkwater Elementary (pictured) and École Mount Prevost. (Kevin Rothbauer/Citizen)
Arson suspect arrested after fires at Cowichan Valley schools

Drinkwater Elementary and Mount Prevost schools hit within a week

A woman writes a message on a memorial mural wall by street artist James “Smokey Devil” Hardy during a memorial to remember victims of illicit drug overdose deaths on International Overdose Awareness Day, in the Downtown Eastside of Vancouver, on Monday, August 31, 2020. THE CANADIAN PRESS/Darryl Dyck
B.C. paramedics respond to record-breaking number of overdose calls in 2020

On the front lines, COVID-19 has not only led to more calls, but increased the complexity

Nanaimo RCMP are seeking the public’s help after a man allegedly assaulted a clerk at James General Store on Victoria Road on Jan. 18. (Submitted photo)
Suspect screams at customer then assaults store clerk in Nanaimo

RCMP asking for information about Jan. 18 incident at James General Store

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Chartwell Malaspina Care Residence in Nanaimo. (News Bulletin file photo)
Two Nanaimo care-home residents have died during COVID-19 outbreak

Death reported Monday was the second related to Chartwell Malaspina outbreak, says Island Health

Rod Bitten of Union Bay won $500,000 in the Lotto Max draw on Jan. 15. Photo supplied
Vancouver Island electrician gets shocking surprise with $500K Extra win

Rod Bitten has been hard at work with home renovations, which is… Continue reading

Eighteen-year-old Aidan Webber died in a marine accident in 2019. He was a Canadian Junior BMX champion from Nanaimo. (Submitted)
Inadequate safety training a factor in teen BMX star’s workplace death in 2019

Aidan Webber was crushed by a barge at a fish farm near Port Hardy

Most Read