TORONTO (Reuters) - Canada’s main stock index rose more than 1 percent on Tuesday, with higher crude and other commodity prices helping boost energy and mining companies as investors returned to buying after a sharp sell-off in recent weeks.
All 10 major sectors of the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE notched gains, with heft provided by heavyweight resource and financial sectors.
“This is just investors coming back, refocusing on the fundamentals and seeing that things aren’t so bad,” said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri.
Oil, gold and copper prices rose on the day, helping Canada’s preponderance of resource-focused companies gain. [O/R] [GOL/] [MET/L]
Suncor Energy Inc (SU.TO) was the biggest positive driver, adding 2.2 percent to C$39, while Canadian Natural Resources Ltd (CNQ.TO) gained 2.1 percent to C$38.74 and Enbridge Inc (ENB.TO) added 1.9 percent to C$53.26.
Shares of Canadian uranium miner Cameco Corp (CCO.TO) jumped 3.8 percent to C$19.57, following news that a town in southwest Japan became the first to approve the restart of a nuclear power station.
All 48 of the country’s nuclear reactors were gradually taken offline following the Fukushima catastrophe in 2011, the world’s worst nuclear disaster since Chernobyl in 1986.
“Hopefully this is the catalyst we all have been waiting for,” said David Talbot, analyst at Dundee Capital Markets. “But two restarts from 48 reactors isn’t going to move the needle much.”
The index - which ended the day up 155.25 points, or 1.07 percent, at 14,624.25 - has recovered almost 1,000 points since a correction knocked it off all-time highs earlier this month.
That slump was fed by sluggish economic growth data, sliding oil prices and other geopolitical risks.
“Obviously we were seeing additional worries about Europe and global growth and Ebola and all these headline risks, but at the end of the day our view of underlying economic growth and corporate earnings growth was largely unchanged,” Fehr said.
But Rahul Khasgiwale, an investment director at Standard Life Investments, wanted more evidence of global recovery before seeking out Canadian stocks.
“Canada doesn’t feature very prominently in our global portfolios. We see better opportunities elsewhere,” he said.
Stock markets have been increasingly choppy in recent weeks, though volatility is still well below historic highs.
The U.S. Federal Reserve started a two-day meeting to discuss monetary policy. Investors largely expect the central bank to assure markets it is prepared to wait a long time before raising rates as it ends a massive bond-buying stimulus program.
Additional reporting by John Tilak, Euan Rocha and Rod Nickel; editing by Nick Zieminski and Matthew Lewis