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Roundup: Canadian stock market skyrockets following China's lead

Xinhua, August 28, 2015 Adjust font size:

Canada's main stock market on Thursday fueled a big rally in resources and financial shares as investors' worries about the turmoil of global capital markets relieved after China's equities rebounded sharply overnight.

On the closing bell, Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index jumped 385.08 points or 2.88 percent to 13,766.67 points, the biggest rise in a one-day trading this year with gainers across the board.

Investors felt relieved when China's main stock index boosted 5.34 percent Thursday, after repeated sharp declines recently, which aroused concerns about the volatility of the global capital market.

Meanwhile, TSX gained momentum from a surge in the crude oil prices when the West Texas Intermediate for October delivery moved up 3.96 U.S. dollars to settle at 42.56 dollars a barrel on the New York Mercantile Exchange.

The energy sector rallied 6.64 percent as Canadian Oil Sands Ltd. jumped 16.5 percent to 7.13 Canadian dollars (about 5.39 U.S. dollars) while Suncor Energy Inc. rallied 5.53 percent to 36.43 Canadian dollars.

And the mining sector skyrocketed 12.7 percent when First Quantum Minerals Ltd. soared 14.12 percent to 6.87 Canadian dollars and Teck Resources Ltd. jumped 22.96 percent to 9.05 Canadian dollars per share.

Financials, the most weighed sector, gained 2.15 percent when Toronto-Dominion Bank rose 1.54 percent to 52.6 Canadian dollars and Canadian Imperial Bank of Commerce advanced 5.86 percent to 95.96 Canadian dollars, after both reporting higher third-quarter profits than expected.

Upbeat data from Statistics Canada also helped boost the TSX index. The federal agency reported on Thursday that Canadian corporations earned 80.9 billion Canadian dollars in operating profits in the second quarter, up 12.9 percent from the previous quarter. The increase resulted mainly from a turnaround in profits in the financial sector and followed a 10.6 percent decline in the first quarter. Overall, operating profits increased in 11 of 22 industries.

This is a surprising bounce back in Canadian corporate profits in the second quarter, according to Leslie Preston, an economist from TD Bank. "However, this was not an overwhelmingly positive report. Profit growth outside of the financial sector was very modest and profits remain below year-ago levels," she said.

On the currency front, the Canadian dollar was higher Thursday to 0.7565 U.S. dollar, compared with 0.7506 U.S. dollar Wednesday. Endit