Canadian stock market volatile to surge higher

GMT 09:48 2015 Thursday ,27 August

Arab Today, arab today Canadian stock market volatile to surge higher

Canadian stock market
Toronto - XINHUA

Canada's main stock market staged a dramatic surge in Wednesday's final trading hour to cap a volatile day amid uncertainties over growth in China.

Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index jumped 230.66 points or 1.75 percent to close at 13,381.59 points.

The TSX surged more than 1 percent at the opening to a high of 13,360.49, but failed to sustain the rally until the closing.

The heavily weighted financial and energy sectors lent some support to the market after being hit hard in the sell-off over the past week that has seen the TSX shed more than 1,100 points, even factoring in a 100-point bounce-back on Tuesday.

However, other resource sectors continued to suffer, with metals and mining the leading decliner, down 3.87 percent. Global gold was the second-worst performer, down 3.71 percent.

Stock markets around the world have been in flux for more than a week amid deep plunges on China's main market and a decision by its central bank to devaluate the yuan in a move to simulate its slowing economy.

Responding to the interest rate cut, China's Shanghai index fell another 1.2 percent Wednesday, following declines of 8.5 percent Monday and 7.6 percent Tuesday. The smaller Shenzhen Composite lost 3.1 percent.

"China's stimulus is now firing on all cylinders. Interest rates have been cut multiple times. The liquidity spigots have been opened. The yuan has been devalued. Fiscal spending is outpacing revenue. Local governments have received a 2 trillion-yuan bailout. Down-payment requirements on property purchases have been reduced," noted Tom Orlik, Bloomberg chief Asia economist.

"Going forward, the economy faces continued downward pressure as exports and new real estate investment both contract. In the immediate future, the central bank is likely to have to provide more liquidity support to offset continued capital outflows," Orlik said. "A critical question is whether China can manage a controlled depreciation of the yuan or continue in an uneasy stasis."

In New York, markets turned positive after six days of heavy losses, including a more than 200-point slide on the Dow Tuesday after a strong, day-long rally fizzled in the final hour.

The Dow Jones industrial average soared more than 600 points to 16,285.71, recapturing a solid portion of the almost 1,350 points it gave up over the previous six sessions. The S&P 500 rose 72.9 points to 1,940.52 and the Nasdaq jumped 191 points to 4,697.

On the commodity markets, benchmark October oil was down 37 U.S. cents at 38.94 U.S. dollars a barrel, while September natural gas was unchanged at 2.70 U.S. dollars per thousand cubic feet. September copper plunged seven U.S. cents to 2.25 U.S. dollars a pound while December gold lost 12 to 1,126 U.S. dollars an ounce.

The Canadian dollar, which hit 11-year lows Tuesday, went up Wednesday to 0.7511 U.S. dollar, compared with 0.7497 U.S. dollar Tuesday.

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