Toronto's main stock index, U.S. indices make gains; loonie up
This is a file image of various stocks.
The Canadian Press
Published Wednesday, May 15, 2019 11:56PM EDT
Last Updated Thursday, May 16, 2019 5:37PM EDT
Toronto's main stock index made a triple-digit gain Thursday and markets south of the border all closed higher as investors sensed the easing of geopolitical tensions after a tumultuous start to the week.
"You're starting to see some optimism," said Kash Pashootan, CEO and chief investment officer at First Avenue Investment Counsel Inc.
The S&P/TSX composite index gained 125.72 points to 16,443.86.
In New York, the Dow Jones industrial average rose 214.66 points to 25,862.68. The S&P 500 index advanced 25.43 points to 2,876.39 and the Nasdaq composite added 75.90 points to 7,898.05.
The gains come after steep losses to start the week, when Toronto's main index shed just over 100 points, while the three major indices in New York fell by more than two per cent each after China announced retaliatory tariffs in response to action by the U.S. administration.
"It's the market playing the game of quantifying tariff probability risk," said Pashootan, "and given that there was a glance of sunshine from a tariff perspective today, markets are taking some comfort in that."
That relief came from media reports that American President Donald Trump could delay new tariffs on car and auto parts imports from Europe by up to six months.
The market is extrapolating that delay and placing a belief that it could carry over to other tariffs that have been spoken about, said Pashootan.
"The irony of it is that comfort comes at a time when the fundamental economic data is, in fact, negative," he said, pointing to Wednesday's American retail sales figures.
The Commerce Department said sales dropped 0.2 per cent in April.
While that's one data point, Pashootan said it's a factor that warrants some pause.
In commodity markets, the Canadian dollar averaged 74.41 cents US, compared with an average of 74.34 cents US on Wednesday.
The June crude contract was up 85 cents at US$62.87 per barrel and the June natural gas contract was up 3.8 cents at about US$2.64 per mmBTU.
The June gold contract fell US$11.60 at US$1,286.30 an ounce and the July copper contract gained about a penny at roughly US$2.75 a pound.