Major Canadian equity index climbs in large rally as Omicron fears subside
Canada’s main stock index posted a third day of gains on Thursday as acute angst over the Omicron variant eased slightly amid encouraging COVID-19 developments.
The S & P / TSX Composite Index rose 148.88 points to 21,218.93, with strong gains across all sectors.
In New York, the Dow Jones Industrial Average climbed 196.67 points to 35,950.56. The S&P 500 was up 29.23 points to 4,725.79, while the Nasdaq composite was up 131.48 points to 15,653.37.
The surges came after Statistics Canada said the economy grew 0.8 percent in October to meet expectations.
“This is the third day of the Santa Claus rally,” said Colin Cieszynski, chief market strategist at SIA Wealth Management, referring to a streak of gains in late December which is a common trend this time of year. .
“Some of the extreme fears of recent times have started to subside.”
Markets came under intense pressure earlier this month over fears over the effects of the latest highly transmissible strain of COVID-19, Cieszynski said. But the US Food and Drug Administration’s emergency approval of Pfizer and Merck’s therapeutic pills since Wednesday has helped spur a rebound.
“I also think data from overseas suspects that while cases may increase, hospital admissions have remained low – people were even reassured a little.”
As Omicron continues to spread across North America, airline and cruise line stocks have rebounded in the United States. In Canada, the S & P / TSX Capped Information Technology Index climbed more than 1.5% on Thursday and energy stocks were flat.
Partly because of this, the Canadian dollar was trading at 78.03 cents US, up slightly from 77.73 cents US on Wednesday.
Nonetheless, Canada hit a record 14,456 new COVID-19 cases on Wednesday as the federal government expanded support for affected employers and workers. Hospitalizations are also on the rise, although early data suggests Omicron carries a lower risk of hospitalization than Delta.
âOverall I think the important thing is that it wasn’t just a few sectors, it was pretty general gains across the board,â Cieszynski said.
He predicted a relatively calm rest of the week, with markets closing at noon Friday, but wondered how long the rebound would last after Monday.
âWe’re still in that kind of sideways trend. Things haven’t collapsed or completely derailed, âhe noted.
“If some of the short-term issues go away, that means investor support is still there below.”
The February crude contract rose US $ 1.03 to US $ 73.79 per barrel and the February natural gas contract fell 23 cents to US $ 3.63 per mmBTU.
The February gold contract was up US $ 9.50 to US $ 1,811.70 an ounce and the March copper contract was up a tenth of a cent to US $ 4.39 the pound.
This report by The Canadian Press was first published on December 23, 2021.
Companies in this story: (TSX: GSPTSE, TSX: CADUSD = X)