TSX buoyed by positive U.S. news
INVESTORS: Sentiment boosted by manufacturing activity on May Day holiday
An unexpectedly positive report on manufacturing activity in the U.S. drove investor sentiment on Tuesday, when many world markets were closed for the May Day holiday.
In Toronto, the benchmark S&P/TSX composite index rose 40.10 points, or 0.33 per cent, to 12,332.79. Six of the 10 sub-indexes advanced, led by energy, up 0.96 per cent, and health care, which rose 0.94 per cent.
Shares in Suncor rose 0.95 per cent to $32.94 after the energy giant hiked its dividend and reported earnings that topped estimates after the market closed on Monday. Talisman Energy fell 3.10 per cent to $12.52 after that company forecast flat production for the rest of the year.
The price of oil rose $1.29 US to $106.16 US a barrel on Tuesday, while gold fell $1.80 US to $1,662.40 US an ounce.
Purchasing managers index figures for a number of countries were released on Tuesday —in China, the official number was 53.3, above the previous reading of 53.1 but slightly below expectations for 53.6; in the U.K. the PMI fell to 50.5 from 52.1 the previous month, missing estimates of 5.15. In Canada, the RBC PMI rose nearly a point in April to 53.3, with all four regions of the country reporting growth.
It was a bigger-than-expected increase in the Institute for Supply Management’s manufacturing index that gave markets a real boost on Tuesday, with the numbers showing manufacturing activity in April increased at its fastest pace in 10 months.
“Economic data for March had raised questions about whether the U.S. economy was slowing,” said analyst Colin Cieszynski of CMC Markets. “[Tuesday’s] PMI number suggests that March may have been a normal pause and that upward momentum may have resumed again in April.”
The Dow Jones industrial average rose 65.69 points, or 0.50 per cent, to 13,279.32, while the Nasdaq pared earlier gains to close at 3,050.44, up 4.08 points, or 0.13 per cent.
Canada’s junior Venture exchange rose 7.64 points, or 0.54 per cent, to 1,431.68.
The Canadian dollar rose 22 basis points to $1.0114 US.
Speaking in Toronto Tuesday, Bank of Canada governor Mark Carney said again that higher interest rates “may become appropriate.”