TORONTO — Canada's main stock index increased for a fifth-straight day to a near three-week high on a broad rally that also swept U.S. markets higher.
"I think what we're seeing here is markets were getting pretty oversold by the latter part of last week and even the early part of this week and we're getting a bit of a trading bounce here," said Colin Cieszynski, chief market strategist at SIA Wealth Management
The tech sector that was most depressed in recent weeks saw a recovery. The sector also got a lift in Canada, gaining 1.9 per cent with Lightspeed Commerce Inc. up 10.7 per cent and Shopify Inc. increasing 5.2 per cent.
"It was only a few days ago people were talking about how badly Shopify was getting crushed, really getting dragged down by the whole U.S. tech sector and weak sentiment towards internet stocks," he said in an interview.
The overall TSX bounce Thursday was weaker than south of the border because the selloff was weaker.
The S&P/TSX composite index closed up 148.43 points to 20,532.18.
In New York, the Dow Jones industrial average was up 516.91 points at 32,637.19. The S&P 500 index was up 79.11 points at 4,057.84, while the Nasdaq composite was up 305.91 points or 2.7 per cent at 11,740.65.
Cieszynski added that there could be some wishful thinking by investors that the Federal Reserve might take a break from raising interest rates since no one knows how inflation will progress through the summer.
"So if anything it's an excuse for a bounce," he said.
The minutes from the May 3-4 meetings saw Fed members agree that 50 basis point increases "would likely be appropriate at the next couple of meetings" to address hot inflation.
He also doesn't think positive days signal that markets have reached a bottom, especially since central banks haven't yet been able to get inflation under control. The current period is also one of the weaker months of the year for stock markets.
"So we could get a trading bounce in the short-term, but there's still the potential for a roller-coaster ride from here for several months."
Eight of the 11 major sectors on the TSX were higher, led by health care, technology, consumer discretionary, industrials and financials.
Health care rose 3.7 per cent with cannabis producer Canopy Growth Corp. up 10.6 per cent.
Air Canada shares climbed 3.9 per cent to help push industrials higher. The heavyweight financials sector increased following positive quarterly results from two of three banks reporting Thursday. TD shares were up 1.6 per cent, but Royal Bank was flat and CIBC dropped two per cent.
Cieszynski said the second day of bank earnings were a "mixed bag" but overall pretty positive.
"The two big take-aways for me were most banks raised dividends, the results generally were better than expected and core banking was driving it while capital markets were soft. And soft capital markets is to be expected given the state of the stock market this year."
Energy rose as crude prices continued to march higher, which is great for producers. Enerplus Corp. was up 2.6 per cent.
The July crude contract was up US$3.76 at US$114.09 per barrel and the July natural gas contract was up 10 cents at US$8.90 per mmBTU.
The Canadian dollar traded for 78.17 cents US compared with 77.90 cents US on Wednesday.
Materials was the biggest laggard on the day, falling seven tenths of a per cent despite higher metals prices.
The June gold contract was up US$1.30 at US$1,847.60 an ounce and the July copper contract was up slightly to US$4.26 a pound.
This report by The Canadian Press was first published May 26, 2022.
Companies in this story: (TSX:LSPD, TSX:SHOP, TSX:AC, TSX:WEED, TSX:TD, TSX:RY, TSX:CM, TSX:ERF, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press