TORONTO – The Toronto stock market advanced for a third consecutive session Thursday amid higher oil prices, while in New York indexes staged a partial recovery from big losses the previous session.
“It’s good to see the markets are a little bit more stable … in the last few days,” said Sadiq Adatia, chief investment officer at Sun Life Global Investments.
“(But) even though the volatility may have slowed down in the last couple days, it’s probably not going away and probably going to remain there for most of the year,” Adatia added.
In Toronto, the S&P/TSX composite index soared 214.16 points to 12,591.93 for a cumulative gain of almost 450 points since a 246-point decline Monday.
In New York, the Dow Jones industrial average rose 125.18 points to 16,069.64 after having shed more than 200 points on Wednesday, while the S&P 500 index advanced 10.41 points to 1,893.36 and the Nasdaq 100 added 38.51 points to 4,506.68.
“The sentiment is a little bit better than what we saw earlier in the year,” he said, noting that the U.S. Federal Reserve’s decision to leave its policy rate unchanged has signalled markets that the U.S. central bank may not move as fast on raising rates as previously anticipated.
U.S. indexes should continue to move in a positive direction, Adatia said, so long as upcoming economic data reports continue to be decent.
The Fed’s decision, as well as the Bank of Canada’s decision to stand pat at least until the federal government releases its budget, has contributed to the Canadian dollar’s recent rise, Adatia said.
On Thursday, the loonie advanced 0.27 of a U.S. cent to 71.18 cents US.
“For the Canadian dollar to drop and stay significantly lower than 70 cents, oil has to be in the 20s,” said Adatia, who projects the loonie will hover between 70 and 75 cents for most of this year.
For the loonie to rise above that threshold, oil prices would have to move past $40 for the majority of the year, according to Adatia, who believes oil prices will pass that mark later in the year.
Like the TSX, the Canadian dollar has been riding a wave of rising oil prices, which have increased over the last three days amid ongoing talks between Russia and Saudi Arabia aimed at curbing production.
On Thursday, the March contract for benchmark North American crude rose 92 cents or 2.8 per cent to US$33.22 a barrel. That was on top of a 6.5 per cent climb over the previous two days.
In other commodities, the March natural gas contract was up 2.5 cents at US$2.182 per mmBtu, while April gold gave back 20 cents to US$1,116.10 an ounce and March copper lost a penny to US$2.05 a pound.