Canada’s main stock index rallied for a fifth straight week to close Friday at an 11-week high after getting a boost from gold stocks.
The S&P/TSX composite index gained 85.27 points to close at 15,366.05 after hitting a high of 15,387.96.
After a deep autumn selloff, investors have returned to the market in search of bargains after the U.S. and Canadian central banks suggested a slowing of interest rate increases, says Kathryn Del Greco, vice president and investment adviser at TD Wealth.
“So with that factor being pushed aside I think you’re starting to see bargain hunters coming out and getting money to work,” she said in an interview.
The Toronto market was pushed higher by the health-care sector as several cannabis companies saw share price increases. They included Canopy Growth Corp., which gained 8.6% after PiperJaffray analyst Michael Lavery raised his target price saying the company is “well-positioned for success” as the industry is poised for long-term growth.
The influential materials sector rose 2.3% on a rise in metal prices. Barrick Gold Corp. led by gaining 2.4% and Kinross Gold Corp. rose more than 2%.
The February gold contract was up US$18.30 at US$1,298.10 an ounce and the March copper contract was up US8.45¢ at US$2.73 a pound.
“We’ve had some strength in the resource sector but I wouldn’t call it a runaway strong day,” Del Greco said.
The Canadian dollar traded at an average of US75.44 compared with an average of US74.90¢ on Thursday.
Several other sectors rose, including technology, industrials and financials. Energy was up slightly as crude oil prices increased again with the March crude contract up US56¢ at US$53.69 per barrel. The March natural gas contract was up US7.4¢ at US$3.07 per mmBTU.
Del Greco attributed the increase to political uncertainty in oil-rich Venezuela with Canada and the U.S. recognizing the election of the opposition leader as president over the incumbent.
“Whenever you have a tension like that with an oil supplier it certainly disrupts the marketplace,” she said.
In New York, the Dow Jones industrial average was up 183.96 points at 24,737.20. The S&P 500 index was up 22.43 points at 2,664.76, while the Nasdaq composite was up 91.40 points at 7,164.86.
Technology stocks gained with investors again willing to take on risk. However, Intel Corp. lost 5.5% on the day after missing analyst expectations.
Del Greco said U.S. market sentiment was helped by an agreement to end the partial U.S. government shutdown for at least three weeks. While positive, the deal is not a market game-changer since it’s only a three-week stopgap measure while the two sides try to negotiate a deal on border security.
“You may find some traders or investors being slightly disappointed that it wasn’t a more concrete, longer-term resolution,” she said. “The market was stronger this morning in hopes that this was coming down the pipeline because there’s been certainly a lot of political pressure to do something.”