Energy stocks rebound pushing TSX higher

Energy stocks rebound pushing TSX higher

Energy stocks rebound pushing TSX higher The S&P/TSX Composite Index is up more than 2% in late morning trading with energy stocks leading the way with gains more than twice the index.  

Canadian energy stocks benefiting from today’s rebound include Calfrac Well Services, TransCanada Corp., and Emera Inc., up 3.8%, 2.5% and 2.4% respectively. 

South of the border Wall Street opened more than 2% higher, recouping some of its losses from the previous day's selloff, its worst in four years, which had put the S&P 500 and Nasdaq composite indexes in correction territory.

Global markets were pummeled on Monday, with Chinese shares falling 8 percent, prompting investor calls for remedial action from authorities that grew louder overnight after the Shanghai Composite Index slumped a further 8%.

Economists said Tuesday's response - a 25 basis point cut in key rates and 50 bps off the reserve requirement rate for large commercial banks - sent a clear signal that Beijing, which has stepped in several times this year to keep China's growth on track, was still willing to intervene.

But as asset prices eased back following the initial euphoria, some questioned whether the measures would help.

"What we need to see to calm investors is positive economic data points out of China, and only when we see that will the rallies be sustainable," said Xavier Smith, investment director at Centre Asset Management in New York.

With China the world's biggest consumer of commodities, crude and metals markets also responded to Beijing's move.

U.S. crude futures traded up 2.3% at $39.10 per barrel, while Brent rose 2.3% to $43.69.

But global oversupply and worries over the severity of the slowdown in China kept oil prices near the 6-1/2-year lows they fell to on Monday, when the market slumped 6 percent.

Copper, often considered a proxy for global economic activity, rose 1 percent.

In China where recent market volatility has been at its most extreme, the central bank's policy move - coming after a shock devaluation of the yuan two weeks ago - drew a guarded reaction.
"This is a big-bang move... Frankly (it) shows a bit of panic in my mind," said Andrew Polk, resident economist at the Conference Board in Beijing.

©2015 Reuters News
Sinead Carew with additional material from Will Ashworth.
--With additional reporting by Tanya Agrawal in Bengaluru, John Geddie, Lionel Laurent, Marc Jones in Europe and China Economics writing by John Stonestreet; editing by Anna Willard and Nick Zieminski.