TSX posts strong gain in catch-up following Victoria Day holiday closure

A man walks past a bank's electronic board showing the Hong Kong share index in Hong Kong Wednesday, Aug. 8, 2018. (AP Photo/Vincent Yu)

TORONTO — Canada's main stock index posted a triple-digit advance as it made up ground to strong rallies in the U.S. over the Victoria Day holiday.

The S&P/TSX composite index closed up 246.58 points or 1.7 per cent at 14,885.48.

"Both the Dow and the S&P 500 had very strong days, the best day they've had in six weeks or so. But the TSX missed that obviously and is playing some catch-up today," said Anish Chopra, managing director with Portfolio Management Corp.

In New York, the Dow Jones industrial average was down 390.51 points at 24,206.86 after gaining almost 912 points or 3.9 per cent on Monday.

The S&P 500 index was down 30.97 points at 2,922.94 on Tuesday a day after hitting its highest level since March 6, while the Nasdaq composite was down 49.72 points at 9,185.

The U.S. stock markets surged to start the week on the potential for a coronavirus vaccine from Moderna showed promising early signs and the economies of some countries, states and provinces starting to reopen after two-month closures to prevent the spread of COVID-19.

"The issue that remains to be seen is whether there'll be further lockdowns, can the coronavirus come back and how would countries, provinces and states deal with that," Chopra said in an interview.

"But it looks like for now things seem to be under control, certainly in the United States as well as Canada as well as many other countries, including in Europe."

The Toronto market's gain on Tuesday lagged the U.S. because the markets are very different, with large weights in Canada in financials and energy, that are still tough areas for investments.

Ten of the 11 major sectors on the TSX were higher led by health care and energy.

Health care surged 9.5 per cent as shares of Aurora Cannabis Inc. climbed nearly 33 per cent, followed by a 12.6 per cent gain by Bausch Health Companies Inc.

Energy was up 5.11 per cent as higher crude oil prices helped Baytex Energy Corp., whose shares were up 16.7 per cent, Crescent Point Energy Corp. up 12.6 per cent and Whitecap Resources Inc. up 11.9 per cent.

The July crude contract was up 31 cents at US$31.96 per barrel and the June natural gas contract was up 4.7 cents at US$1.83 per mmBTU.

Energy prices continue to recover from increased demand as economies reopen and the benefit of cuts in production.

"It's part of the recovery in energy over the last two days but we've only seen it in Canada today," added Chopra.

The Canadian dollar gained more than one cent to reach the highest level in more than two months by trading for 71.98 cents US compared with 70.95 cents US on Friday.

The heavyweight financials sector increased nearly two per cent as Power Corp. gained 8.2 per cent.

A 15.4 per cent increase by fast-food chain MTY Food Group Inc. helped consumer discretionary while industrials rose three per cent on 15 and 14.4 per cent gains respectively by Chorus Aviation Inc. and Air Canada.

Materials was up largely due to gains in the forestry sector even though the price of crude continue to rise.

The June gold contract was up US$11.20 at US$1,745.60 an ounce and the July copper contract was up 1.4 cents at US$2.42 a pound.

The lone sector to lose was technology, which dipped as Shopify Inc. lost 3.1 per cent.

This report by The Canadian Press was first published May 19, 2020.