TORONTO (Reuters) - Canada’s main stock market index on Tuesday capped off its best quarter since the global financial crisis with additional gains, as investors focused on the speed of economic recovery from the coronavirus crisis rather than data showing a record decline for monthly GDP.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 0.8% at 15,515.22. Since the end of March, the TSX has climbed nearly 16% to notch its biggest quarterly advance since the second quarter of 2009. It plunged 21.6% in the prior three months.
“It has been a remarkable quarter,” said Mike Archibald, a portfolio manager at AGF Investments. “I would expect that on the back half of the year, as economic conditions improve, stock markets continue to move a little bit higher.”
“There still continues to be a mountain of cash on the sidelines, waiting for the market to pull back to get in,” Archibald said.
Canada’s real GDP is likely to grow 3% in May, bouncing back from a record decline of 11.6% in April, Statistics Canada said in a flash estimate, as businesses across the country began to reopen following coronavirus-linked shutdowns.
The economically-sensitive and heavily-weighted financial services sector gained 0.8%, while gold stocks climbed 2.1% along with higher gold prices. For the second quarter, the gold index was up 46.7%.
Shares of Cineplex fell nearly 19% on Tuesday to a three-and-a-half-month low after reporting a hit to first-quarter results from the COVID-19 pandemic, while the price of oil, one of Canada’s major exports, settled 1.1% lower at $39.27 a barrel as investors worried that rising COVID-19 cases would hurt demand.
Still, oil has rallied more than 90% since the end of March. That has been supportive of the Canadian dollar.
The loonie was trading 0.6% higher at 1.3577 to the greenback, or 73.65 U.S. cents on Tuesday, having touched its strongest intraday level since June 24 at 1.3566. For the quarter, it was up 3.6%, its biggest gain since the third quarter of 2017.
Canadian government bond yields rose across a steeper curve, with the 10-year yield up 2.2 basis points at 0.532%. Canada’s bond market, as well as the TSX, will be closed on Wednesday for the Canada Day holiday.
Reporting by Fergal Smith; Editing by Steve Orlofsky and Sonya Hepinstall
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