TORONTO (Reuters) - Canada’s main stock index rebounded on Tuesday after a surge in gold and oil prices drove up shares of natural resource companies and helped boost investor sentiment after three straight sessions of declines.
The declines had been triggered by a sharp selloff in U.S. markets, where investors have been pulling out of biotechnology and technology sectors on fears prices might have run ahead of themselves. Also weighing on stocks have been concerns about the U.S. Federal Reserve’s efforts to roll back its monetary stimulus program and uncertainty about when the Fed might raise interest rates.
“The markets are without a catalyst at the moment, and where the catalyst comes from will probably set the direction,” said Youssef Zohny, portfolio manager at Stenner Investment Partners, a subsidiary of Richardson GMP.
“As we look to the whole year, we expect the Canadian market to hold up pretty well, relative to the global equity markets,” he added.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 102.12 points, or 0.72 percent, at 14,372.45.
The benchmark index, which is up about 5.5 percent in 2014, has outperformed the S&P 500 index .SPX so far this year.
“I don’t expect the Canadian market to match any downside, but I don’t see our market charging ahead if the U.S. market is heading south,” said David Cockfield, managing director and portfolio manager at Northland Wealth Management. “We don’t have any supercharged P/Es in the Canadian market.”
Nine of the 10 main sectors on the index were higher on Tuesday.
Financials, the index’s most heavily weighted sector, added 0.3 percent. Bank of Montreal (BMO.TO) climbed 0.8 percent to C$75.09.
Shares of gold producers rose 2.2 percent, helped by a gain in the price of the precious metal. Goldcorp Inc (G.TO) added 1.4 percent to C$27.53, and Barrick Gold Corp (ABX.TO) was up 2 percent at C$20.54.
In corporate news, Osisko Mining Corp’s (OSK.TO) chief executive said it would be tough for Goldcorp to raise its bid to take over Osisko by enough to trump a rival deal, and it is more likely that the gold producer will walk away from the transaction. Osisko shares jumped 2.8 percent to C$7.44.
Editing by Peter Galloway