TORONTO – The Toronto stock market closed sharply higher Tuesday amid lessening anxiety over the Crimea crisis after Russian President Vladimir Putin said his country doesn’t want to annex more of Ukraine.
He made the comment as he signed a bill to annex Crimea, two days after the territory’s residents, many of whom are Russian speaking, voted overwhelmingly to break away from Ukraine.
The S&P/TSX composite index jumped 137.08 points to 14,368.97.
The Canadian dollar shed early gains to fall 0.68 of a cent to 89.79 cents US after Bank of Canada governor Stephen Poloz said the economy may miss expectations in the first few months of this year. He added that slower than normal growth may be the new norm for Canada and the world, meaning ultra-low rates could be around longer than thought.
The loonie had earlier advanced on data showing that Canadian manufacturing sales rose 1.5 per cent to $50.4 billion in January, the largest gain since February 2013.
Western governments, including Canada, have imposed travel bans and asset freezes on people from Russia, Crimea and Ukraine, who are seen as key players in organizing what’s considered an unlawful vote.
U.S. indexes advanced with traders also feeling relief that sanctions levied against Russia for its role in the referendum have been targeted specifically against individuals as opposed to wider measures that might disrupt Russian economic activity.
The Dow Jones industrials ran ahead 88.97 points to 16,336.19, the Nasdaq moved 53.36 points higher to 4,333.31 and the S&P 500 index rose 13.42 points to 1,872.25.
Markets had lost ground at the end of last week ahead of the Crimea vote but those losses are almost made up. Generally, there has been little negative reaction on markets to the crisis after it quickly became apparent that the West wouldn’t respond militarily to the Russian incursion into Crimea.
“They’re not even batting an eye,” said Chris King, portfolio manager at Morgan, Meighen and Associates.
“It’s the economy that counts and the U.S. is doing OK. The Crimea doesn’t have any structural importance to the market.”
Traders also looked to Tuesday’s start of a two-day interest rate meeting of the U.S. Federal Reserve.
Data out Monday showing U.S. factory production in February rose at its fastest rate in six months reinforced expectations the Fed will go ahead with a third planned reduction of its stimulus, cutting monthly bond purchases by US$10 billion to $55 billion.
Consumer staples led TSX advancers with shares in Alimentation Couche-Tard (TSX:ATD.B) up $1.79 to $86.70.
The convenience store owner reported that it had 96 cents per share of diluted earnings, while adjusted diluted net earnings came in at 92 cents. Analysts had forecast 93 cents per share of adjusted earnings and 88 cents per share of net income.
Couche-Tard also announced that founder Alain Bouchard is handing off the role of president and chief executive officer to Brian Hannasch, who has been the chief operating officer.
Most sectors were higher, with the energy sector up 1.4 per cent as the April crude contract in New York rose $1.62 to US$99.70 a barrel.
The metals and mining sector was ahead 1.7 per cent with May copper unchanged at US$2.95 a pound.
The TSX gold sector was the only decliner, down about 0.44 per cent as a willingness to take on further risk sent bullion in New York down $13.90 to US$1,359 an ounce.