TORONTO — The Toronto Stock Exchange closed up more than 170 points on Monday, supported by the strength of its energy sector.
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The Toronto floor’s S&P/TSX Composite Index climbed 179.89 points to end the session with 21,537.45 points.
South of the border, U.S. stock markets were closed for the Martin Luther King Jr. Day holiday.
“It was a good day for the TSX,” said Pierre Cléroux, vice-president of research and chief economist for the Business Development Bank of Canada. “The TSX was in positive territory very early in the day, and it kept momentum all day.”
The energy sector led the charge, rising 1.72%. Within this group, the strongest gains were in shares of Advantage Oil & Gas, which rose 3.50%, while shares in Baytex Energy and Arc Resources were up 3.10% and 3.50%. .09% respectively.
Crude oil prices rose US$1.68 to US$83.30 a barrel, while natural gas prices fell regarding 1 US cent to US$4.26 per million BTU.
Mr. Cleroux explained that global demand for oil continues to outstrip supply, which is why the West Texas Intermediate benchmark price has been so high in recent months.
“The fundamental reason is the fact that we have underinvested in oil in recent years, probably since 2014,” he said. “There is not a lot of investment to increase supply, and on top of that there have been political problems around the world, such as the Organization of the Petroleum Exporting Countries (OPEC), which maintains a policy of no increase in supply. And Omicron doesn’t seem to be slowing the demand for oil around the world.”
The strong performance of Canadian energy stocks indicates that investors believe high oil prices will be here to stay, at least for a while, Cléroux added.
In addition to energy, Canadian bank stocks also posted gains during Monday’s session, and the financials sector advanced 1.15%.
Cléroux said markets were likely reacting to two positive economic releases on Monday. The Bank of Canada’s quarterly business survey—which was conducted before the Omicron variant arrived—showed that business owners were concerned regarding rising inflation and supply chain challenges. supply, but they generally feel quite positive regarding their recovery from the COVID-19 recession.
In addition, Statistics Canada data on manufacturers’ sales for the month of November helped to paint an economic picture tinged with optimism, noted Mr. Cléroux.
“Manufacturers’ sales were up regarding 2.6% in November, so that’s another piece of good news that probably helped markets today,” he said.
The Canadian Real Estate Association announced on Monday that annual sales of residential properties hit a new high in 2021, eclipsing the previous record, set in 2020, by regarding 20%.
In general, the Canadian economy is doing quite well, despite the current wave of Omicron, concluded Mr. Cléroux.
“Personally, as an economist, I don’t think Omicron will have a big impact on growth this year, and I think many economists share that view,” he said.
The price of gold depreciated by US$4.90 to US$1816.50 an ounce and that of copper fell by 13 cents US to US$4.42 a pound.
In the currency market, the Canadian dollar traded at an average rate of 79.87 cents US, up from 79.71 cents US on Friday.
The Canadian Press