TORONTO (Reuters) - Canada’s main stock index advanced to its highest in almost two months on Thursday, buoyed by the European Central Bank’s massive stimulus measures and an unexpected rate cut by the Bank of Canada.
The Bank of Canada cut interest rates on Wednesday in an effort to ease the impact of weaker oil prices on the Canadian economy. The move fueled a 1.8 percent jump in the TSX on Wednesday.
The ECB on Thursday launched a government bond-buying program to inject hundreds of billions of euros into the euro zone’s flagging economy.
The central bank moves helped the Canadian benchmark index turn positive on the year, recovering from a slump in the energy sector that was triggered by lower oil prices.
“We don’t think the price of oil can stay down very long. But energy shares are going to go through a wild up-and-down phase,” said Douglas Davis, vice chairman at Davis-Rea.
“We may have to test low levels before going up again,” he added.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 203.56 points, or 1.4 percent, at 14,763.98. All 10 of the main industry sectors on the index were higher.
The price of bullion strengthened after the ECB’s action and pushed up shares of gold miners. Barrick Gold Corp (ABX.TO) rose 1.2 percent to C$15.87.
In corporate news, Royal Bank of Canada (RY.TO) said it will buy City National Corp CYN.N, a U.S. lender serving high-net worth clients, in a $5.4 billion deal. RBC shares shed 1.5 percent to C$74.71.
Editing by Leslie Adler and G Crosse