Canadian stocks rose a second day as equities rallied around the world, led by gains in China and Japan’s strongest rally since 2008.
Canada’s benchmark index jumped as much as 1 percent before giving back some gains after the Bank of Canada maintained its main interest rate at 0.5 percent. The central bank has made two cuts this year amid the plunge in oil prices.
Canadian shares followed global markets higher. A gauge of developed and developing equity markets increased 1.2 percent as Japan’s Nikkei 225 Average soared 7.7 percent, the most since October 2008, amid speculation a selloff that drove valuations to an 11-month low was overdone. Equities rallied a second day in China, Canada’s second-largest trading partner.
The Standard & Poor’s/TSX Composite Index rose 57.57 points to 13,688.24 at 10:51 a.m. in Toronto. The equity gauge has pared its drop this year to 6.4 percent.
“In this market the overall sentiment can change very quickly,” said Prab Sagoo, a Canadian equity market analyst at Nasdaq Advisory Services on the phone from Montreal.
Stephen Poloz, governor of the central bank, was expected to leave its main interest rate unchanged in its lone decision during the Canadian federal election campaign. In its decision the Bank of Canada said a weaker currency and household spending are leading a recovery from the shock of lower oil prices.
Global shares are rebounding from the worst month since May 2012, as the MSCI World All-Country World Index tumbled 7 percent in August after Chinese stocks slumped amid increasing concern economic growth in the country was stalling.
The resource-rich S&P/TSX has been one of the worst-performing developed markets in the world this year as crude plunged. Energy and raw-materials producers have the biggest declines among 10 industries in the S&P/TSX this year.
Manulife Financial Corp. climbed 1.8 percent after the insurer was said to have agreed to buy Standard Chartered Plc’s Hong Kong pension business for about $400 million, according to a person with knowledge of the matter. Financial services stocks climbed 0.7 percent for a second straight daily advance. Royal Bank of Canada increased 1.3 percent.
Bombardier Inc. jumped 9.2 percent to pace gains among industrials stocks. The company said its transportation rail unit wasn’t for sale after a report the maker of planes and trains had rejected an offer by a Chinese company. Railway operator Canadian National Railway Co. increased 1.1 percent.