TSX climbs in broad rally as Omicron fears ease
Canada’s main stock index posted a third day of gains Thursday as severe angst over the Omicron variant eased slightly amid encouraging COVID-19 developments.
The S&P/TSX composite index rose 148.88 points to 21218.93 with broad gains across sectors.
In New York, the Dow Jones industrial average climbed 196.67 points to 35950.56. The S&P 500 was up 29.23 points at 4725.79, while the Nasdaq composite was up 131.48 points at 15653.37.
The surges came after Statistics Canada announced that the economy grew by 0.8 per cent in October to match expectations.
“It’s the third day of Santa Claus rally,” said Colin Cieszynski, chief market strategist at SIA Wealth Management, referring to a late December streak of gains that’s a common pattern at this time of year. “Some of the extreme fears of late have started to ease.”
Markets came under intense pressure earlier in the month over fears about the effects of the latest, highly transmissible strain of COVID-19, Cieszynski said. But the U.S. Food and Drug Administration’s emergency approval of treatment pills from Pfizer and Merck since Wednesday has helped spur a rebound.
“Also I think the data coming in from overseas suspecting that even though cases may go up, hospitalizations have stayed down — people even have taken a bit of comfort from that as well.”
While Omicron continues to propagate in North America, airline and cruise-line stocks have bounced back in the United States.
In Canada, S&P/TSX Capped Information Technology Index spiked more than 1.5 per cent Thursday and energy shares held steady.
Partly as a result, the Canadian dollar traded for 78.03 cents US, an uptick from Wednesday’s 77.73 cents US.
Nonetheless, Canada hit a record of 14,456 new COVID-19 cases on Wednesday as the federal government expanded support for affected employers and workers. Hospitalizations are also on the rise, though early data suggest Omicron carries less risk of hospitalization than Delta.
“Overall, I think the important thing is that it wasn’t just a couple of sectors, it was fairly broad-based gains across the board,” Cieszynski said.
He predicted a relatively quiet rest of the week, with markets closing at midday Friday, but questioned how long the post-Monday rebound would last.
“We’re still in this kind of sideways trend. Things haven’t collapsed or completely gone off the rails,” he noted.
“If some of the shorter-term issues go away, that says the investors’ support is still there underneath.”
The February crude contract was up $1.03 US at $73.79 US per barrel, and the February natural gas contract was down 23 cents at $3.63 US per mmBTU.
The February gold contract was up $9.50 US at $1,811.70 US an ounce, and the March copper contract was up a tenth of a cent at $4.39 US a pound.