TSX jumps with oil, closes 2.6 percent higher for the week

Fri Jan 22, 2016 5:37pm EST
 
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index scored its biggest rally in more than four years on Friday, led by oil and gas stocks as crude prices surged and investors welcomed hints of more stimulus from global central banks.

Sharp gains on Thursday and Friday left the index 2.6 percent higher for the week, supported by a recovery in crude oil prices and optimism that central banks in Europe and Japan will increase policy stimulus.

"The market was becoming extremely oversold in the short run," said Irwin Michael, portfolio manager at ABC Funds. "Investors were anxiously awaiting for some stability in the commodities, and oil and gas and the mining sector."

U.S. crude CLc1 prices settled at $32.19 a barrel, up 9.01 percent, as bearish traders who had taken out record short positions scrambled to close them. [O/R]

The energy sector climbed 5.6 percent, with Suncor Energy Inc (SU.TO: Quote) up 5.3 percent at C$31.33 and Enbridge Inc (ENB.TO: Quote) advancing 6.2 percent to C$47.42.

A surprisingly big jump in retail sales provided much-needed vigor for a struggling domestic economy.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE rose 353.72 points, or 2.94 percent, to 12,389.58. It was the sharpest advance since Nov. 30, 2011, and all 10 main groups were in positive territory.

On Wednesday, the index hit its lowest level since August 2012 at 11,531.22.   Continued...

 
A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014.    REUTERS/Mark Blinch