TORONTO — Canada’s main stock index rose for a fifth straight day for the first time in seven months as the market continued to bounce back from last month’s lows.
The S&P/TSX composite index closed up 98.76 points to 14,903.49, after hitting a one-month high of 14,921.06 in earlier trading.
The market is eight per cent above the low set late last year but still 10 per cent below the July high, which is a healthy place to be as it recalibrates, says Kash Pashootan, CEO and chief investment officer at First Avenue Investment Counsel Inc.
“The markets are bouncing off of an Armageddon-like scenario where there was really a spiralling out of control panic and markets have taken a breath and realized that yes there are lots of challenges out there but there’s also some good things going on as well,” he said in an interview.
“So you’re now seeing rationale come back into the markets, you’re seeing less emotional selling going on.”
The Toronto Exchange’s performance Thursday was helped by crude oil rising to its highest level in more than a month and further gains among cannabis producers including Canopy Growth Corp.’s 12 per cent gain that boosted the health-care sector by 4.3 per cent.
The February crude contract was up 23 cents at US$52.59 per barrel and the February natural gas contract was down 1.5 cents at US$2.97 per mmBTU.
The energy index increased by more than one per cent, followed by defensive sectors utilities and telecommunications. The only sector to fall was materials.
In New York, the Dow Jones industrial average rose 122.80 points at 24,001.92. The S&P 500 index was up 11.68 points at 2,596.64, while the Nasdaq composite was up 28.99 points at 6,986.07.
The gains were more muted than in Toronto as the U.S. retail index underperformed. Macy’s shares lost 18 per cent after reporting a weak holiday season and American Airlines fell after issuing a disappointing forecast ahead of the start of the upcoming quarterly results.
The Canadian dollar traded at an average of 75.56 cents US compared with an average of 75.64 cents US on Wednesday.
The February gold contract was down US$4.60 at US$1,287.40 an ounce and the March copper contract was down 1.95 cents at US$2.64 a pound.
Pashootan said he expects returns in equity markets will be muted in the coming years compared with the past.
“The bounce back off of the lows are simply the market recovering some of the panic that caused it to go down more than it should,” he said. “But the fact of the matter when you take the emotion out of it is that there is a high probability that returns in equity markets over the next two to three years will be dismal given the landscape of where we stand.”