TSX soars as oil prices hit highest level this year
Linda Nguyen, The Canadian Press
Published Monday, March 7, 2016 1:15AM EST
Last Updated Monday, March 7, 2016 5:15PM EST
TORONTO -- Crude prices that hit their highest level this year helped lift the Toronto Stock Exchange on Monday to its eighth straight gain.
The S&P/TSX composite index climbed 171.10 points, or about 1.3 per cent, rising to 13,383.60.
The recent rally shows that investors have realized that market losses earlier this year did not accurately reflect economic conditions, said Canadian market strategist Craig Fehr.
"It had felt like sentiment had become far more sour than the economic reality would've supported," said Fehr, who works at Edward Jones in St. Louis.
He said economic data over the past couple of weeks has shown that the global economy is on a positive path and worries about a possible recession, particularly in the U.S., don't appear imminent.
The Toronto stock market found support from all sectors except one: real estate. Health care stocks led the pack by advancing four per cent.
Shares in Valeant Pharmaceuticals (TSX:VRX) helped boost the sector, with the embattled Quebec-based drug company seeing its stock grow by 6.75 per cent, or $5.51 to $87.15. Valeant announced earlier in the day that it will release its fourth-quarter results on March 15 after a two-week delay.
Markets in New York were much more tepid as the Dow Jones industrial average added 67.18 points at 17,073.95. The broader S&P 500 composite index was barely changed, up 1.77 points at 2,001.76. The Nasdaq composite index lost 8.77 points at 4,708.25, dragged down by falling shares from the biggest tech companies -- Facebook, Apple, Netflix and Google.
The Canadian dollar was at 75.32 cents US, up 0.27 of a U.S. cent.
Commodities were mostly higher, with the April crude contract gaining $1.98 to US$37.90 per barrel, its highest price this year. The last time oil closed above that level was on Dec. 24, 2015, when it settled at US$38.10.
Fehr classified the recent spike in crude as a "short-term bounce," cautioning that the commodity has yet to find a bottom.
"There's still a lot of challenges to the oil environment that can suggest that oil can remain fairly low -- somewhere in the 30s -- for some time to come," he said.
The April natural gas contract was up two cents at US$1.69 per mmBtu, while May copper was unchanged at US$2.28 a pound.
Investors shied away from bullion as the April gold contract fell $6.70 to US$1,264 an ounce.