TORONTO — Canada’s main stock index enjoyed another triple-digit climb Tuesday on continued hope that a COVID-19 vaccine will lead to a global economic recovery.
The S&P/TSX composite index closed up 139.51 points to 16,615.37 after gaining 193 points to start the week.
Monday’s market move followed the announcement by Pfizer that their coronavirus vaccine is 90 per cent effective. However, broad dissemination of the vaccine will likely take about a year.
“A lot can happen between now and then,” said Natalie Taylor, a portfolio manager with CIBC.
“I would have been more concerned if we saw a large reversal of the moves that we saw yesterday…We’re holding the gains that we made yesterday and even adding to them, so I think that that’s pretty optimistic.”
She said Tuesday’s move was more muted than the day earlier but followed the same underlying trends.
“In the past, when we’ve had kind of these value reversals, they’ve been dramatic but short-lived. So it remains to be seen whether this can be sustained, but so far it’s holding in.”
Eight of the 11 major sectors on the TSX were higher.
The market’s gain was largely led by the heavyweight financials sector, along with energy and telecommunications.
Financials rose 2.4 per cent with Manulife Financial Corp. increasing 5.2 per cent and several Canadian banks seeing their shares climb.
The increases stemmed from a rotation to sectors including financials that had been laggards, supported by an increase in long-term yields.
There’s also relief on the credit side stemming from the pandemic, said Taylor.
“If there’s a light at the end of the tunnel for the pandemic, then that eases a lot of the credit concerns around the banks,” she said in an interview.
“They are highly levered and economically sensitive businesses. So I think that that outlook with a vaccine is definitely helping the shares there.”
The energy sector increased 2.2 per cent with shares of Enerplus Corp. gaining 11.6 per cent, followed by Whitecap Resources Inc. at five per cent.
The December crude oil contract was up $1.07 at US$41.36 per barrel and the December natural gas contract was up nine cents at US$2.95 per mmBTU.
The technology and materials sectors were lower, along with health care, which was pulled down by a 26 per cent drop in shares of Aurora Cannabis Inc.
Technology dropped 2.2 per cent and materials was down 2.5 per cent as investors rotated out of investments where they had made some money.
Materials dropped even though the price of gold rallied from Monday’s sharp decrease.
The December gold contract was up US$22 at US$1,876.40 an ounce and the December copper contract was essentially unchanged at nearly US$3.16 a pound.
U.S. markets were mixed after hitting record highs on Monday.
The Dow Jones industrial average was up 262.95 points at 29,420.92. But the S&P 500 index was down 4.97 points at 3,545.53, while the Nasdaq composite was down 159.92 points at 11,553.86.
The S&P and Nasdaq were largely dragged down by weakness among technology stocks that have large weights on those exchanges.
The Canadian dollar traded for 76.82 cents US compared with 77.10 cents US on Monday.
This report by The Canadian Press was first published Nov. 10, 2020.
Companies in this story: (TSX:ACB, TSX:ERF, TSX:WCP, TSX:MFC, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press