Canada Stocks Rise With Stimulus in Focus as Some Seek Bargains
(Bloomberg) -- Canadian equities rose Thursday as investors continue to digest global stimulus plans while also on the lookout for buying opportunities.
After sliding as much as 3.1% at the open, the S&P/TSX Composite erased that slump, rising to close 3.8% higher. All eleven sectors rose, with cannabis and energy producers among some of the biggest gainers.
Pot stocks rallied after Bank of America said that people cooped up at home has spurred higher demand for marijuana. Hexo Corp. was the No. 1 stock on the benchmark with a 56% surge. Oil and gas stocks joined the rally in crude after U.S. President Donald Trump said he could get involved in the standoff between Saudi Arabia and Russia that had roiled the commodities market.
The Canadian government has taken steps to stave off a recession and is already indicating it will do more. But its federal deficit will likely blow past C$100 billion ($69 billion) this year, according to one economist. Scotiabank’s Rebekah Young said in an interview with Bloomberg News that the stimulus package will probably need to double in order to stabilize the economy.
Meanwhile, investors may be assessing potential buying opportunities after fears of a recession and the oil price sent the S&P/TSX Composite through a key support level to the lowest since 2012 on Wednesday. “People were basically selling anything that they could” ahead of today, Mark Wisniewski, senior portfolio manager of Toronto-based Ninepoint Partners said. Liquidity in the market also may not have been as strong as it should have been, he added.
- Western Canada Select crude oil traded at a $13.50 discount to West Texas Intermediate
- Spot gold fell 0.8% to $1,474 an ounce
- The Canadian dollar weakened 0.1% to C$1.4518 per U.S. dollar
- The 10-year government bond yield fell 4.7 basis points to 1.001%
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