Toronto stock market starts week with broad rally led by energy sector

Toronto stock market starts week with broad rally led by energy sector

TORONTO — Canada’s main stock index got a lift to start a holiday-shortened week with a broad-based rally led by the energy sector.

The month of June looks set to end with the same trajectory as April and May, in a rebound from the March lows.

The first half of the year was dynamic with a big drop as the COVID-19 pandemic resulted in an economic shutdown followed by a swift market recovery, said Craig Fehr, investment strategist, Edward Jones

“I think as we progress from here, markets are really going to take their cues from the incremental progress, or the lack thereof, in the economic restart.”

The S&P/TSX composite index closed up 200.74 points at 15,389.72. That’s less than 200 points or 1.3 per cent up for the month with one day of trading to go before the Canada Day holiday.

In New York, the Dow Jones industrial average was up 580.25 points at 25,595.80. The S&P 500 index was up 44.19 points at 3,053.24, while the Nasdaq composite was up 116.93 points at 9,874.15.

Markets partially recovered from last week’s selloff despite ongoing concern about rising COVID-19 infections in some U.S. states. Unlike earlier cases that prompted a broad lockdown, the latest rise in cases doesn’t seem to include a commensurate rise in hospitalizations and deaths.

“And so while that’s a small silver lining I think it’s a reflection of the fact that we are seeing some progress in the evolution of this health care crisis,” Fehr said in an interview.

However, he said markets have been anxious because of the rise in cases and the potential for reopening efforts to slow.

“I just don’t think it’s going to be one direction or another. I think there’s too much of a mixture of both good and bad news for the markets to repeat what they did in February and March to the downside or to repeat what they did in April and May to the upside.”

Fehr said Monday’s gains, following last week’s losses ”is a good reminder that it’s probably not going to be a one-way path either down or up from here.”

Also supporting Monday’s market gains was market data showing a record rebound in U.S. home sales in May and profits at Chinese industrial firms rising for the first time in six months in May.

Boeing shares also got a big lift after the Federal Aviation Administration confirmed that it had approved key certification test flights for the grounded 737 Max.

Shares of Air Canada climbed 4.7 per cent to help the industrials sector.

All 11 major sectors of the TSX gained, led by energy and consumer discretionary.

Higher crude oil and natural gas prices pushed shares of Shawcor Ltd. up 7.3 per cent, Cenovus Energy Inc. up 4.9 per cent, Husky Energy Inc. up 4.6 per cent and Suncor Energy Inc. up nearly four per cent.

The August crude contract rose US$1.21 at US$39.70 per barrel and the August natural gas contract was up 16.5 cents at nearly US$1.71 per mmBTU.

Shopping mall fast food chain MTY Food Group Inc. increased 7.4 per cent to help the consumer discretionary sector.

The heavyweight financials sector rose by nearly one percentage point on gains by the Bank of Nova Scotia and Toronto-Dominion Bank.

Materials rose, with forest-products suppliers Norbord Inc. and Interfor Corp. up 5.8 and 4.7 per cent respectively.

The August gold contract was up 90 cents at US$1,781.20 an ounce and the September copper contract was up 1.35 cents at US$2.69 a pound.

The Canadian dollar traded for 73.09 cents US compared with 73.12 cents US on Friday.

This report by The Canadian Press was first published June 29, 2020.

Companies in this story: (TSX:AC, TSX:SCL, TSX:CVE, TSX:HSE, TSX:SU, TSX:MTY, TSX:BNS, TSX:TD, TSX:OSB, TSX:IFP, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press

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