TORONTO – A rosy global outlook and rising oil prices helped push Canada’s main stock market solidly ahead at the close of Tuesday, while major U.S. indices smashed through new records.
Strong gains in metals and energy stocks helped drive the S&P/TSX composite index in Toronto 115.79 points higher to 14,477.67.
On Wall Street, the Dow Jones industrial average and S&P 500 index both broke all-time highs, with the Dow up 120.74 points to 18,347.67 — surpassing its last record close in May 2015.
The broader S&P 500 composite index advanced 14.98 points to 2,152.14, while the Nasdaq composite gained 34.18 points to 5,022.82.
Market analyst Colin Cieszynski said the recent surges in North American stock markets is being spurred by more perceived stability in the two major economies of Britain and Japan.
“You’re seeing the unwinding of some of the fear trades that dominated in recent weeks. Some of that is easing,” said Cieszynski, who is chief market strategist at CMC Markets Canada.
Traders are being reassured by notions that the U.K. is getting “back to business” following the surprising result of the Brexit vote last month. British Prime Minister David Cameron, who steps down Wednesday, will be replaced by Home Secretary Theresa May.
“The political chaos that emerged out of Brexit is starting to subside,” Cieszynski noted, adding that the impact of the U.K.’s departure from the European Union will still take some time to unwind.
Traders are also being encouraged by expectations of more stimulus from Japan, where newly re-elected Prime Minister Shinzo Abe has promised new government spending. Investors are betting he’ll keep flooding the market with money by expanding bond purchases.
But this week is set to be chock full of economic news that will have the power to inject volatility into stock and currency markets.
On Wednesday, Bank of Canada governor Stephen Poloz is expected to make an announcement about the central bank’s benchmark interest rate, which is widely anticipated to stay on hold at 0.5 per cent.
Elsewhere, a new round of trade and GDP data is expected to be released from China later this week. And on Friday the U.S. will get the latest update on its economy, with retail sales data expected to garner the most interest.
Meanwhile, burgeoning oil prices continued to help the Canadian dollar appreciate. The loonie gained half a cent, climbing 0.54 of a cent to 76.75 cents US, as the August crude contract jumped $2.04 at US$46.80 per barrel.
In other commodities, August gold fell $21.30 to US$1,335.30 an ounce, August natural gas gained three cents at US$2.73 per mmBTU, and September copper contracts rose seven cents to US$2.21 a pound.
— With a file from The Associated Press
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