TORONTO (Reuters) - Canada’s main stock index jumped nearly 3 percent on Thursday, recouping this week’s hefty losses, as a 10 percent surge in crude oil prices fueled a rally in energy shares and helped lead an across-the-board bounce.
U.S. crude CLc1 prices vaulted 10.26 percent to settle at $42.56 a barrel on a global rally in equity markets and an unexpected fall in U.S. crude inventories. [O/R]
“That’s really given the energy stocks a breather. All of them are having a really good day,” said John Kinsey, portfolio manager at Caldwell Securities. “We’ve had two really good days here now, and I think that means maybe the panic has subsided, at least for now.”
All 10 of the index’s main groups were on higher ground, with the three most influential sectors, energy, materials and financials climbing 6.6, 4.5 and 2.2 percent respectively. Those groups make up roughly two-thirds of the index’s weight.
Canada’s biggest bank, Royal Bank of Canada (RY.TO), jumped 2.6 percent to C$73.99.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended 385.08 points higher, or 2.88 percent, at 13,766.67.
Advancing issues outnumbered declining ones on the TSX by 229 to 18, for a 12.72-to-1 ratio on the upside.
The utilities group jumped 4 percent, while industrials rose 2.7 percent.
On the earnings front, both Toronto-Dominion Bank (TD.TO) and Canadian Imperial Bank of Commerce (CM.TO) reported higher third-quarter profits that topped estimates. The results helped TD rise 1.5 percent to C$52.60, while CIBC rose 5.9 percent to C$95.60.
Kevin Headland, director at Manulife Asset Management’s Portfolio Advisory Group, cautioned that the impact of cheap energy prices was starting to hit banks, noting that it will become tougher for Canadian banks to maintain their margins.
He also warned of tougher days ahead in general for the TSX.
“Demand for commodities is definitely not improving. The slowing growth in China, the slowing growth around the world, I think that’s really going to keep a lid on the TSX for the next little while,” he said.
Reporting by Solarina Ho; Editing by Andrew Hay and James Dalgleish