Canadian energy stocks surged on Wednesday which helped offset the selloff in gold-mining shares (affected by the falling bullion price). The The Toronto Stock Exchange’s S&P/TSX composite index was up 1.25 percent, gaining 182.90 points up to 14,573.33. Nine of the index’s 10 main sectors were higher.
The markets have responded positively to a Republican control of the U.S. Senate as well as data that showed impressive US private job growth.
The TSX has had a choppy few weeks and fell to new lows. However, it is now 7 percent higher than its eight-month low in October.
Colin Cieszynski, chief market strategist at CMC Markets, told Reuters that market sentiment is picking up. He said:
“The TSX was hit hard in the last couple of days because of the energy weakness, and it’s benefiting from a rebound rally,”
“The Street seems to be pretty happy with the U.S. election results,” adding “Investors overall are optimistic about the potential for growth in the U.S. economy.”
Financials (the most heavily weighed sector) gained 1 percent, with shares of the Royal Bank of Canada increasing by 1.3 percent, and Toronto Dominion Bank shares climbing 1 percent.
Shares of energy producers shot up by 3 percent. Sunoco Energy gained 3.5 percent and Canadian Natural Resources Ltd gained 3.2 percent.
With a Republican-controlled senate there has also been more optimism about the TransCanada Corp Keystone pipeline (which will transport crude from Alberta to the Gulf) being approved by the US government. TransCanada Corp shares rose 2.8 percent as a result.
The only sector to drop was the gold-mining sector, driven by weak prices of the commodity.
Other major gains include Magna International Inc, the Canadian auto parks maker, which rose by 6.1 percent to C$117.29 after posting a 47 percent increase in quarterly earnings. Tim Hortons also rose, by 0.8 percent, as third quarter profit beat market expectations.
