Roundup: Canadian stock market soaring on rally in oil prices

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TORONTO – Canada’s main stock market in Toronto on Wednesday posted the biggest rise in two weeks when the trading sentiment was boosted by a rally in oil prices ahead of the U.S. Federal Reserve’s key policy meeting that started Wednesday.

The Toronto Stock Exchange’s benchmark Standard & Poor’s/TSX Composite Index jumped 301.07 points, or 2.24 percent, to close at 13,763.78 points, with all the eight major sectors in the green for a second consecutive day.

The energy sector skyrocketed 5.25 percent, fueled by a rally in the global oil prices as light, sweet crude for October delivery gained USD 2.56 to settle at USD 47.15 a barrel on the New York Mercantile Exchange.

Most of the Canadian oil and gas giants hailed the increase when Suncor Energy Inc. moved sharply higher to 34.81 Canadian dollars (about USD 26.43) a share, and Canadian Natural Resources Ltd. soared 6.27 percent to 27.98 Canadian dollars per share.

Meanwhile, the most influential sector Financials was 2 percent higher when investors eyed on the Fed’s two-day policy meeting, where policy makers will decide whether to raise interest rates for the first time in nearly a decade or not.

Industrials gained 1.87 percent after Statistics Canada reported Wednesday that the manufacturing sales rose 1.7 percent to 52.2 billion Canadian dollars in July, as sales went up in the motor vehicle parts and motor vehicle assembly industries. The gain followed revised increases of 0.7 percent in May and 1.5 percent in June.

“After weighing on economic growth during the first half of the year, the manufacturing industry is on track to improve over the remainder of 2015, and should help to lift overall growth,” Dina Ignjatovic, an economist from TD Bank, said in a report.

The Canadian economic activity is expected to recover after contracting in the first half of 2015, according to the Bank of Canada Deputy Governor Agathe Cote.

However, although non-energy sectors in this country supported the economic growth in recent months, the turbulence in the crude market is still a sensitive factor which imposes negative pressure on the energy sector.

Cote also said that the sharp drop in oil prices has reduced real gross domestic income.

On the currency front, the Canadian dollar on Wednesday moved higher to USD 0.7592 after the release of the positive Canadian manufacturing sales data, compared with 0.7549 U.S. dollar Tuesday.