TSX on three-day winning streak thanks to good news on oil prices

TSX on three-day winning streak thanks to good news on oil prices

TSX on three-day winning streak thanks to good news on oil prices

By Eric Lam

Bloomberg News

Almost midway through Thursday trading the TSX is up more than 2% on good news on energy prices, the big banks and U.S. GDP growth.

Energy stocks are leading the way with Encana, Baytex Energy and Canadian Oil Sands all up more than 10% on fairly heavy trading.

Energy producers paced gains among equities, led by the biggest jump in New York crude in three months. Markets in the U.S. and Europe climbed after Chinese stocks snapped the worst sell-off since 1996. The Chinese government resumed its intervention in the stock market Thursday and is also supporting the yuan, according to people familiar with the matter.

The big banks are also helping with today’s rally.

Toronto-Dominion Bank added more than 1% percent after third-quarter profit rose to a record on retail banking. The lender reclaimed the position of Canada’s largest bank as assets climbed to C$1.1 trillion, surpassing Royal Bank of Canada. Canadian Imperial Bank of Commerce rallied more than 4% percent as profit topped analysts’ estimates. It also raised its dividend.

The Standard & Poor’s/TSX Composite Index jumped 235.51 points, or 1.8 percent, to 13,617.10 at 10:21 a.m. in Toronto. The benchmark Canadian equity gauge has rebounded 4.3 percent in three days, the biggest such increase since December. The rally cut the S&P/TSX’s loss for the month to 5.9 percent. The index is headed for a fourth straight monthly decline, the longest such streak since September 2011.

The MSCI All-Country World Index of developed and developing markets has increased 3.5 percent in two days, the best two-day rally since July 2012. The S&P 500 rose 1.3 percent in New York while the Stoxx Europe 600 Index soared 3.2 percent.

Global markets were buoyed today after the U.S. economy grew at a 3.7 percent annualized rate in the second quarter on bigger gains in consumer spending, and China’s government stepped up its attempts to stabilize the country’s stock market and currency by buying equities and selling U.S. treasuries, according to people familiar. China and the U.S. are Canada’s two largest trading partners.

The resource-rich Canadian benchmark equity gauge has been one of the worst-performing developed markets in the world this year amid a collapse in crude prices. China unexpectedly devalued the yuan on Aug. 11, further fueling concerns about global growth and the demand for commodities from oil to copper.

Raw-materials and energy producers, which account for about 30 percent of the broader equity gauge, are the worst-performing industries in the S&P/TSX this year. Crude has slumped more than 35 percent from this year’s June peak amid concern global growth is slowing.

Teck Resources Ltd., Canada’s largest diversified miner, jumped 6.7 percent after agreeing to combine its Chile copper- and-gold project with Goldcorp Inc. to cut costs.

Files by Will Ashworth