TORONTO — The Toronto Stock Exchange closed at a record high on Thursday as investors welcomed the U.S. Federal Reserve’s outlook for interest rates and commodity prices rallied.
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The Toronto floor’s S&P/TSX Composite Index gained 302.39 points to end the session with 21,771.22 points.
The flagship index of the TSX shows an increase of 2.6% since the beginning of the year. The American markets, despite their progress on Thursday, are still accumulating declines compared to the start of 2022.
In New York, the Dow Jones Industrial Average rose 417.66 points to 34,480.76 points, but has fallen 6.4% since Jan. 1. The broader S&P 500 index took 53.81 points to 4411.67 points, for a cumulative decline of 8.6%, while the Nasdaq composite index grabbed 178.23 points to 13,614.78 points, and has returned 14.3% so far this year.
Initial reaction to the tone of the US central bank’s statement that accompanied Wednesday’s rate hike was negative. But sentiment warmed following its chairman, Jerome Powell, explained that the plan for six more rate hikes this year was not set in stone.
“Markets rallied significantly through (yesterday’s) close and continued to do so today,” said Macan Nia, co-head of investment strategies at Manulife Investment Management.
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According to him, the markets accelerated on Thursday due to expectations that the central bank will make less than six increases. They also reacted favorably to Mr. Powell’s comments on the strength of the US economy and the good performance of the labor market.
“You can also mount a positive defense by arguing that, yes, rates are going to rise to fight inflation, but at the Fed they think the economy is strong enough to withstand that,” he said. he pointed out during an interview.
All 11 sectors on the TSX advanced on Thursday, in particular energy, which gained 3.5% on the 8.6% rise in the price of crude oil, which returned to the mark of US$100 a barrel. .
On the New York Commodities Exchange, oil prices rose US$8.06 to US$101.65 a barrel, while natural gas rose 24.2 cents US to US$4.99 million BTUs.
The price of gold rose US$34.00 to US$1943.20 per ounce and that of copper rose 10.2 cents to US$4.70 per pound.
In the currency market, the Canadian dollar traded at an average rate of 79.05 US cents, up from 78.61 US cents the previous day.
The Canadian Press
