TSX leads global charge with rallies

TORONTO • Canada’s main stock index posted its first back-to-back rally since the COVID-19 crisis began to hit stocks last month as stimulus measures appear set to become a reality in Canada and the U.S.

The TSX was the prime beneficiary and led the global charge Wednesday, said Candice Bangsund, portfolio manager for Fiera Capital.

“Some real robust numbers in Canada and again, that’s likely a result of investors edging back into the market towards the hardest hit sectors and regions of the market with notable outperformance in both energy and financials boosting the TSX,” she said.

The S&P/TSX composite index closed up 568.15 points, or 4.5 per cent, to 13,139.28.

Coupled with Tuesday’s 1,342-point gain, the TSX has climbed 17 per cent in two days but still remains nearly 27 per cent below its Feb. 20 all-time peak.

In New York, the Dow Jones industrial average was up 495.64 points at 21,200.55. The S&P 500 index was up 28.23 points at 2,475.56, while the Nasdaq composite was down 33.56 points at 7,384.29.

The relief rally began in overnight markets after the U.S. Congress agreed to a US$2 trillion stimulus package to complement Federal Reserve support.

Wednesday’s approval by the House of Commons of an $82-billion package also helped the TSX.

“The passing of the baton to fiscal stimulus that’s really buoying sentiment these days,” said Bangsund.

The Canadian dollar gained nearly one cent to trade for US69.92 cents compared with an average of US69.01 cents on Tuesday.

Ten of the 11 sectors of the TSX were higher as several companies enjoyed very big days.

The energy sector rose more than eight per cent as Arc Resources Ltd. and Vermilion Energy Inc. were up about 21 and 20 per cent respectively on higher crude oil prices.

The May crude contract was up 48 cents at US$24.49 per barrel and the May natural gas contract was down 1.5 cents at US$1.71 per mmBTU.

The heavyweight financials sector increased 6.7 per cent with Laurentian and National banks each gaining about 11 per cent.

Bangsund said cyclical sectors that were hit the hardest during the downturn were among the leaders during the risk-on trade.

“And that is largely why the TSX is outperforming so drastically due to the sizable exposures in both of both of those sectors,” she said.

Industrials inched up slightly despite a 28.5 per cent gain for Chorus Aviation Holdings Inc. and 25.6 per cent rise by NFI Group Inc. Air Canada shares rose by nearly 16 per cent.

Materials was slightly higher even though gold fell.