tsx bargain hunters send market higher
The Toronto stock market staged a stunning turnaround Wednesday as bargain hunters moved in mid- afternoon, enabling the TSX to overcome a plunge of almost 200 points to close higher.
The market had been in a deep funk ahead of a gathering of European Union leaders. Traders were skeptical the leaders could come up with a plan to contain the eurozone debt crisis.
The S& P/ TSX composite index closed up 113.02 points to 11,564.8, led by a sharp gain in mining shares even as prices for oil and copper hit fresh, multi- month lows.
“You can only go down so far and then all of a sudden, some group looks at this and says stocks are down at the area where they’re attractive,” said Fred Ketchen, manager of equity trading at Scotia Capital.
The TSX Venture Exchange climbed 9.73 points to 1,256.48.
The Canadian dollar was also off the worst levels of the session, down US0.23¢ to US97.64¢. It had earlier moved as low as US97.13¢, its lowest level since December, as investors sought safety in U. S. Treasuries and avoided riskier trades such as stocks, commodities and resource- based currencies like the loonie.
The currency failed to benefit from a retail sales report for March that met expectations. Statistics Canada said retail sales rose 0.4% to $ 39.1 billion in March, more than offsetting a decline in February.
U. S. markets had also been deep in the red on mounting worries that Greece will be forced to exit the eurozone, but closed well off the worst levels of the session. The Dow Jones industrial average slipped 6.66 points to 12,496.15.
The Nasdaq composite index gained 11.04 points to 2,850.12 and the S& P 500 index was ahead 2.23 points at 1,318.86.
The TSX has had a dreadful month on worries about the eurozone and a slowing global economy. The main index is down 9.2% from its highs of late February and down 6.2% for this month alone on worries about the eurozone and a slowing global economy. “Europe is the problem,” added Mr. Ketchen, “and Europe will remain a big problem until they get their heads straightened out and grow up and become mature in their attitude toward their own economies and that of their own region.”
Bullion prices also continued to retreat, down another $ 28.20 to US$ 1,548.40 an ounce, but the gold sector jumped about 4.5% and Goldcorp Inc. ran up $ 2.50 to $ 38.40.
A higher U. S. dollar has also pressured commodity prices. A stronger greenback usually helps depress prices for oil and metals, which are denominated in dollars, as it makes those commodities more expensive for holders of other currencies.