TORONTO – Stock markets raced higher Wednesday as trading resumed for the first time since the U.S. Congress agreed on measures to avoid the so-called “fiscal cliff.”
The deal, reached just before midnight Tuesday night, left several issues unresolved and it was unclear how long markets would be lifted by the agreement.
But traders took to the developments positively at first glance.
The S&P/TSX composite index gained 149.28 points to 12,582.81 while the TSX Venture Exchange was ahead 18.65 points at 1,239.95.
The Canadian dollar rose 1.15 of a cent to 101.66 cents US.
On Wall Street, the Dow Jones industrial jumped 233.60 points to 13,337.74, the Nasdaq rose 81.83 points to 3,101.34 and the S&P 500 index gained 28.87 points to 1,455.06.
The bill that Congress approved calls for higher taxes on incomes over $400,000 for individuals and $450,000 for couples, a victory for President Barack Obama. Earnings above those amounts would be taxed at a rate of 39.6 per cent, up from 35 per cent. It also delays for two months $109 billion worth of across-the-board spending cuts set to start taking affect this week.
Though fiscal cliff fears have eased, investors still have a host of issues to worry about — not least the prospect of more debates over unresolved longer-term U.S. budget issues.
Next up is a fight over the debt ceiling, or how much the government is allowed to borrow. Obama has said he will not negotiate the issue.
In commodities, oil prices rose with the February contract on the New York Mercantile Exchange ahead $1.62 to US$93.44 a barrel.
Gold prices picked up with the March bullion contract ahead $12.10 to US$1,687.90 an ounce. Copper prices for the March contract were up 8.4 cents to US$3.65 a pound.
On the TSX, metals and mining stocks were the biggest gainer, rising 2.8 per cent. Teck Resources (TSX:TCK.B) was up $1.17 to $37.32.
BlackBerry-maker Research In Motion (TSX:RIM) shares gained 17 cents to $11.97 as reports surfaced that Apple may be testing its next iPhone model with a mid-year target release date.
In Europe, the FTSE 100 index of leading British shares jumped 2.5 per cent to 6,042, its first foray above the 6,000 mark since July 2011. The CAC-40 in France rose 2.2 per cent to 3,725 while Germany’s DAX was up 2.1 per cent at 7,770.
Earlier, in Asia, Hong Kong’s Hang Seng index shot up 2.9 per cent to close at 23,311.89, its highest finish since June 1, 2011. Australia’s S&P/ASX 200 surged 1.2 per cent to close at 4,705.90, its best finish in 19 months, while South Korea’s Kospi jumped 1.7 per cent to 2,031.10.