Canada’s main index rose higher on Thursday as financial stocks were lifted by Bank of Canada chief’s positive comments on the economy, while rising oil prices buoyed the energy sector.
At 11:13 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite Index rose 114.26 points, or 0.74 percent, to 15,623.88.
All of Canada’s 10 main index sectors were higher
Bank of Canada Chief Stephen Poloz on Wednesday said the economy was “finally positive” after a long adjustment to a sharp fall in oil prices.
Mr. Poloz also said that while interest rates would go up from their current low levels, moving too quickly could create a financial stability risk.
The heavyweight financial sector, up around 0.9 per cent, was boosted by Toronto-Dominion Bank and Canadian Imperial Bank of Commerce, both of which gained about 1.2 per cent.
Energy stocks sat up 0.5 per cent. Encana Corp. rose 1.5 per cent, while Suncor Energy Inc. increase 0.9 per cent.
Shares of Husky Energy Inc had fallen 0.8 per cent after oil and gas producer lowered its 2018 output forecast, saying it would temporarily cut heavy oil production due to weakening prices of the commodity.
Stantec Inc rose 4.3 percent after the company initiated a strategic review of construction services provider MWH Constructors, a part of its company.
New Gold shares fell 7.8 per cent after the company reported first-quarter results. The company was the largest decliner on TSX.
A gauge of global equities advanced on Thursday, boosted by a slew of solid quarterly earnings in Europe and the United States, while the euro weakened in the wake of comments by European Central Bank chief Mario Draghi.
Technology stocks jumped 2.28 per cent, led by gains in Facebook, up 8.94 per cent and Visa, up 4.26 per cent, after their quarterly results.
Facebook reported a surprisingly strong 63-per-cent rise in profit and an increase in users, with no sign business was hurt by a scandal over the mishandling of personal data. Its shares were on track for their best day in over two years.
Also supporting equities was a drop in the 10-year U.S. Treasury yield below the 3-per-cent mark, as a fall in domestic core capital good orders in March was offset by a decline in jobless benefit filings to their lowest level in over 48 years.
“A slight pullback in yields is likely to give investors a chance to focus on corporate results,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The Dow Jones Industrial Average rose 221.06 points, or 0.92 perc ent, to 24,304.89, the S&P 500 gained 23.07 points, or 0.87 per cent, to 2,662.47 and the Nasdaq Composite added 106.78 points, or 1.52 per cent, to 7,110.51.
In Europe, Volkswagen shares climbed 2.56 per cent even though its first-quarter operating profit fell as investors were encouraged by its new chief executive, the carmaker’s financial health and lower provisions for the diesel emissions scandal.
The pan-European FTSEurofirst 300 index rose 0.85 per cent and MSCI’s gauge of stocks across the globe gained 0.62 per cent.
MSCI’s index was poised to snap a five-session losing streak, its longest since November.
The euro dropped to session lows after ECB President Mario Draghi hailed “solid” euro zone growth but kept rates unchanged, without a clear signal about ending the central bank’s quantitative easing program. The dollar strengthened as short positions unwound on the U.S. economic data.
The euro fell to its lowest since mid-January at $1.204 after the European Central Bank announced its decision to keep monetary policy unchanged. The single currency had initially rebounded after Draghi played down concern over recent softness in data.
The dollar index rose 0.37 per cent, with the euro down 0.36 per cent to $1.2115.
A sharp sell-off in bonds over the last week has been pushing up global borrowing costs, putting additional focus on when the ECB will end its 2.55 trillion euro (US$3.7-trillion), three-year stimulus program.
After touching four-year highs, yields on 10-year U.S. Treasuries dipped below 3 per cent as buyers emerged following a week-long sell-off spurred by concerns about rising inflation and growing borrowing by the U.S. government.
The rise in borrowing yields and commodity prices has caused several companies, such as Caterpillar and 3M, to caution this week about rising costs, raising flags for investors about the strength of future earnings.