Markets rebound, fail to erase losses
Most global markets bounced back Wednesday after their worst trading day so far in 2012, but failed to erase the previous day’s losses.
In Canada, the benchmark S&P/TSX composite index posted its first positive close in four sessions, rising 51.53 points, or 0.42%, to 12,350.16. Nine of the 10 sub-indexes advanced, led by consumer goods, up 1.08%, and energy, up 0.98%. Financials was the only decliner, dropping 0.22% as all seven of Canada’s banks lost ground, including
Laurentian Bank, which slipped 0.69% to $44.74 after its first-quarter earnings, excluding some items, missed estimates.
The price of crude oil rose US$1.46 to US$106.16 a barrel, while gold clawed back just over one-third of the previous day’s losses, gaining US$11.80 to US$1,683.90 an ounce.
Asian markets slid again on Wednesday, but European and North American indexes advanced as more banks signed on as voluntary participants in the Greek debt swap ahead of Thursday’s deadline. So far the participants represent investors holding 58% of the bonds eligible for the swap.
“There’s a lot of blind optimism and hope on the part of the people that are trading this market,” Danielle Park, a money manager at Venable Park Investment Counsel Inc., in Barrie, Ont., told Bloomberg.
While most eyes will be on Greece ahead of the Thursday evening deadline for the debt swap, five central banks are scheduled to make interest rate announcements before North American markets open again, including the Bank of Canada, as well as the Reserve Bank of New Zealand, the Bank of Korea, the Bank of England and the European Currency Board.
“While no changes are expected to interest rates or (quantitative easing) programs, comments from central bankers could highlight the trend in monetary policy for some time to come,” says analyst Colin Cieszynski of CMC Markets. Other economic news expected Thursday that could have a bearing on investor sentiment includes gross domestic product and trade data from Japan; industrial production figures from Germany and initial jobless claims for the previous week in the U.S., ahead of Friday morning’s employment reports in both the U.S. and Canada.
The Canadian dollar was once again trading above par on Wednesday. It closed at US$1.0018, up 24 basis points. The Dow Jones industrial average gained 78.18 points, or 0.61%, to 12,837.33 after a private report showed payrolls increased slightly more last month than had been expected. The Nasdaq composite index rose 25.37 points, or 0.87%, to 2,935.69. Canada’s junior Venture exchange rose 16.80 points, or 1.05%, to 1,621.67.