- S&P/TSX rebounds most since 2011, two weeks after bear market
- Energy and materials lead index higher as commodities rally
A rally in the price of crude oil and speculation central banks around the world are prepared to tamp down financial-market volatility fueled the biggest gain since November 2011 for Canadian stocks.
The Standard & Poor’s/TSX Index jumped 2.9 percent to 12,389.58 at 4 p.m. in Toronto, capping the gauge’s first weekly gain of the year. Nine of the index’s 10 main industries rose more than 1.1 percent, with energy, utility and industrial shares the biggest gainers. The S&P/TSX, which entered a bear market two weeks ago, fell on Wednesday to its lowest level since August 2012. It’s down 4.8 percent in 2016.
Canada joined a rebound among global equities sparked by speculation the European Central Bank and Bank of Japan are poised to add to stimulus at the same time China reassured investors it would do more to damp volatility. Crude oil surged 8.9 percent, bringing its two-day increase past 20 percent.
Canada’s December inflation rate was the fastest in a year, led by double-digit gains for fruit and vegetables and a reduced drag from gasoline prices. The consumer price index rose 1.6 percent in December from a year ago following the rate of 1.4 percent the prior month, Statistics Canada said Friday from Ottawa. Canada’s currency strengthened for a third straight day against its U.S. peer following 13 straight days of weakening. The so-called loonie is up 3 percent versus the greenback since Wednesday.
All but one of the 55 companies in the S&P/TSX energy index rose as the gauge climbed 5.5 percent. Baytex Energy Corp. surged 15 percent, while Paramount Resources Ltd. and Enerplus Corp. climbed at least 9.3 percent. Penn West Petroleum Ltd. rose 15 percent to the highest level in more than two weeks.
Raw-materials producers increased 1.2 percent as a Bloomberg index of commodities rose the most since Aug. 27. Confor Corp. and Interfor Corp. gained more than 9.9 percent, while Western Forest Products Inc. and Lundin Mining Corp. climbed at least 5.8 percent.
Barrick Gold Corp., the world’s largest producer of the metal, rose 2.2 percent even after it said it may book as much as $3 billion in impairment charges as a prolonged gold slump forces it to revise its price assumptions for 2016. The price of gold was little changed. The resource has slipped 3.8 percent since the start of November.