October 16, 2014 / 11:49 AM / in 3 years

TSX bounces back as U.S. data calms fears

TORONTO (Reuters) - Canada’s main stock index jumped on Thursday as positive U.S. economic data helped ease concerns about global growth, boosting shares in most major sectors.

A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch

Investors were encouraged by data showing that the number of Americans filing new claims for jobless benefits fell to a 14-year low last week and industrial output rose in September.

The market initially tumbled to an eight-month low but then recovered to record its first gain in the last five sessions. The energy sector, which has been battered in the last three months over concerns about oil demand, rebounded sharply and had the biggest positive influence on the market.

Worries about the direction of the global economy and fears that the U.S. Federal Reserve might raise interest rates have hit equity markets hard in recent weeks.

The Toronto stock market’s benchmark TSX index has lost more than 10 percent of its value since reaching a record high last month.

“The realization has come that the United States is linked to global growth, and they cannot carry the weight of global demand on their own,” said Roland Chalupka, chief investment officer of Fiduciary Trust Canada, a unit of Franklin Templeton Investments.

”Sentiment for Canadian equities is tentative,” he added. “(It) is getting worse in the commodity-driven sectors.”

Chalupka, who helps manage about C$1.6 billion in assets, said that the Canadian equity market was “richly valued” despite the recent pullback.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 183.09 points, or 1.32 percent, at 14,052.97 after a choppy session.

”This is what happens when you get volatility. You get whipped, smacked around, turned around left and right,” said Barry Schwartz, portfolio manager at Baskin Financial Services. “We’ve forgotten that this can happen because we haven’t seen it in a long time.”

Nine of the 10 main sectors on the index were higher on Thursday.

Shares of energy producers received a lift from the oil price. Canadian Natural Resources Ltd (CNQ.TO) added 4.3 percent to C$37.57 ($33.38), and Suncor Energy Inc (SU.TO) climbed 2.3 percent to C$37.14.

Financials, the index’s most heavily weighted sector, advanced 0.6 percent. Toronto Dominion Bank (TD.TO) climbed 1.6 percent to C$52.07.

The materials sector, which includes mining stocks, declined 0.4 percent. Teck Resources Ltd TCKb.TO lost 2.5 percent to C$17.48.

Editing by Peter Galloway and Cynthia Osterman

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