Indian envoy warns of 'big red line,' days after charges laid in Nijjar case
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
Canada's main stock index has its strongest two-day performance in more than 10 months on easing fears about the latest COVID-19 variant that helped push the price of oil above US$70 a barrel.
The S&P/TSX composite index closed up 301.55 points to 21,162.65 after gaining nearly 228 points on Monday.
In New York, the Dow Jones industrial average was up 492.40 points at 35,719.43. The S&P 500 index was up 95.08 points at 4,686.75, while the Nasdaq composite was up 461.77 points or three per cent at 15,686.92.
Tuesday's moves followed a strong start to the week as volatility continues to be largely shaped by news about the Omicron variant, said Royce Mendes, executive director, economics at CIBC Capital Markets.
“Right now markets are viewing some of the latest information on the severity of the disease in regions of the world which saw early outbreaks of Omicron as positive news,” he said in an interview.
White House chief medical adviser Dr. Anthony Fauci on Sunday said the variant might be less dangerous than the earlier Delta variant, potentially allowing travel and other restrictions to ease.
Mendes said a continuance or maintenance of recent market gains could be dependent on confirmation from epidemiologists that Omicron is less deadly and less severe.
“If we don't see any more information or we start to see the data suggesting more dire situations, I think we could see markets turn a little bit more sour with regards to risk appetite.”
All 11 major sectors on the TSX moved higher with five increasing by at least one per cent.
Energy led, gaining 3.1 per cent as crude oil prices surged on optimism about demand given the assessment of the variant, along with ongoing concerns about geopolitical tensions between the U.S. and Russia over Ukraine following a virtual meeting between presidents Joe Biden and Vladimir Putin.
“Tensions remain high and I think what you're seeing in global energy markets is a little bit of caution with regards to expectations of future supply,” Mendes said.
The January crude oil contract was up US$2.56 or nearly 3.7 per cent at US$72.05 per barrel after reaching an intraday high of US$73.03. The January natural gas contract was up 5.1 cents at US$3.71 per mmBTU.
There were strong gains across the energy sector with shares of Crescent Point Energy Corp. rising 9.6 per cent and Enerplus Corp. up 6.6 per cent.
The Canadian dollar also climbed, trading for 78.99 cents US compared with 78.25 cents US on Monday.
The appreciation follows a rise in global energy prices and building expectations that the Bank of Canada will hike interest rates early next year, said Mendes. The central bank is expected on Wednesday to maintain rates unchanged but could signal the path for increases on the heels of November's strong employment numbers.
“The jobs numbers were much better than they had anticipated, and the question is whether the Bank of Canada is going to sound more hawkish and more in a rush to hike rates, which would make January a possibility,” he said.
However, Mendes said the central bank needs to balance the risks from Omicron, which remain largely unknown.
“It may be a case where the Bank of Canada kicks the can down the road and doesn't give the market a whole lot to chew on because they don't know just yet what the economy is going to look like in January, so signalling too far ahead, might not be something that they're able to do.”
Health care, technology and consumer discretionary were also strong on the day.
Technology rose 2.8 per cent with Dye & Durham Ltd. and Hut 8 Mining Corp. up 10.7 and 8.8 per cent, respectively. Shopify Inc. gained 5.5 per cent while Lightspeed Commerce Inc. was 5.2 per cent higher.
Materials rose 1.1 per cent on higher gold prices.
The February gold contract was up US$5.20 at US$1,784.70 an ounce and the March copper contract was up two tenths of a cent at US$4.34 a pound.
This report by The Canadian Press was first published Dec. 7, 2021
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
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