TORONTO (Reuters) - Canada’s main stock market churned out a record gain on Tuesday as hopes rose that global stimulus measures will ease the economic impact of the coronavirus pandemic, with the index rebounding from an eight-year low the previous day.
The Toronto Stock Exchange’s S&P/TSX composite index closed up nearly 12% at 12,571.08, its biggest gain going back to July 1979, based on Refinitiv Eikon data.
On Monday, the TSX hit its lowest intraday level since October 2011 at 11,172.73. Since peaking in February, the index has tumbled 30%.
“I understand why clients and investors want to liquidate the portfolio... because the speed and velocity of the moves are frightening,” said Barry Schwartz, a portfolio manager at Baskin Financial Services. “At the end of the day though, I am quite certain we will recover probably all of this within a year.”
Stocks on Wall Street also posted strong gains on Tuesday as Democrats and Republicans said they were close to a deal on a $2 trillion stimulus bill aimed at providing financial aid to Americans out of work and help for distressed industries.
Canadian Prime Minister Justin Trudeau said he wanted flexibility to enact future spending measures as the House of Commons convened to pass a C$27 billion emergency cash injection to soften the financial blow of the coronavirus outbreak.
The heavily weighted financial services sector rose more than 13%, while the materials group was up 12.5%. It was led by a gain of nearly 42% for base and precious metals producer First Quantum Minerals Ltd.
The price of gold soared $74 to about $1,626 an ounce, while the price of oil, one of Canada’s major exports, settled 2.8% higher.
Oil has been pressured in recent weeks by the sharply lower demand due to the virus and a price war between producers Russia and Saudi Arabia.
Suncor Energy Inc cut its 2020 production outlook and suspended share repurchases for the year following the decline in crude oil prices and because of the economic impact of the virus outbreak. Still, its shares rallied 13%.
The Canadian dollar strengthened 0.1% to 1.4492 per U.S. dollar, or 69.00 U.S. cents. The currency, which last Thursday hit a four-year low at 1.4669, traded in a range of 1.4375 to 1.4532.
Canadian government bond yields rose across the curve in sympathy with U.S. Treasuries. The 10-year was up 5 basis points at 0.868%.
Reporting by Fergal Smith; Editing by Jonathan Oatis, Bernadette Baum and Dan Grebler