The Toronto Stock Exchange (TSX) reached its highest level in almost two months on Friday with resource companies and commodity prices rising strongly amid signs that central banks in the Eurozone and China are prepared to take further measures to boost their economies.
The S&P/TSX composite index, which includes the prices of the largest companies on the TSX, rose by 50.14 points on Friday to 15,125.32.
The benchmark TSX saw its sixth consecutive day and sixth successive week with gains, recovering from a steep fall in October.
China’s announcement that it had cut interest rates, plus its pledge to be ready to inject extra credit into its financial system if needed, encouraged investors, as did the ECB’s head Mario Draghi’s comment that he was willing to “step up the pressure” to kick start the Eurozone’s anemic economy.
China’s surprise announcement was the first time since 2012 that the country had cut rates, following indications that the world’s second-largest economy was losing steam.
Source: Yahoo Finance
The loonie (Canadian dollar) also had a good Friday, rising by 0.57 of a US cent to 89.02 US cents. Higher than expected October inflation, at 2.4% annually, got people wondering whether the Bank of Canada might reconsider its monetary policy.
US markets also rose on Friday, with the S&P 500 index climbing 13.23 points to 2,065.98, the Dow Jones industrials 120.6 points ahead at 17,839.6, and Nasdaq advancing by 20.99 points to 4,722.86.
The moves by the central banks pushed up commodity prices on Friday. The base metals group rose 6%, with December copper rising 4 US cents to $3.06 a pound. The energy sector rose 1.7%.
The gold sector increased 1.6% while December bullion jumped by $14.20 to $1,205.10 per ounce.
The Canadian stock market is heavily influenced by natural resource stocks. The country is one of the largest exporters of commodities in the world.