TSX posts strong gain in catch-up after weekend

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% at 14885.48.

“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 24206.86 after gaining almost 912 points or 3.9% on Monday.

The S&P 500 index was down 30.97 points at 2922.94 on Tuesday a day after hitting its highest level since March 6, while the Nasdaq composite was down 49.73 points at 9185.10.

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% as shares of Aurora Cannabis Inc. climbed nearly 33%, followed by a 12.6% gain by Bausch Health Companies Inc.

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

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

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 2% as Power Corp. gained 8.2%.

A 15.4% increase by fast-food chain MTY Food Group Inc. helped consumer discretionary while industrials rose 3% on 15% and 14.4% 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 $11.20 US at $1,745.60 US an ounce and the July copper contract was up 1.4 cents at $2.42 US a pound.

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