TORONTO — Canada's main stock index moved up midweek as the price of oil regained some of the ground it lost in recent days and gold surged higher.
The June futures contract bounced back Wednesday after plunging to a more than two-decade low. On Monday, May's contract moved into negative territory for the first time.
"It's just nuts what's going on with the front-end futures markets, but oil companies are actually seeing some nice performance today," said Michael Greenberg, portfolio manager at Franklin Templeton Multi-Asset Solutions.
The June crude contract was up US$2.21 or 19 per cent at US$13.78 per barrel and the June natural gas contract was up 6.9 cents at nearly US$2.05 per mmBTU.
That pushed the key energy sector up 6.5 per cent with Secure Energy Services Inc. gaining 25.8 per cent, Seven Generations Energy Ltd. up 10.2 per cent and Cenovus Energy Inc. increasing 9.9 per cent.
Low oil prices are forcing some producers to cut production in Canada's oil patch or the shale oil patch in the United States.
But prices will rise once the lockdown eases and people begin driving again, said Greenberg.
"We don't expect a quick rebound because we don't expect a very quick, fast, fast rebound on the economic front as far as everyone getting back to work and travelling and taking cruises again," he said in an interview.
"But we do see a recovery. It's just going to be probably fairly slow."
Higher gold prices pushed the gold sector up 5.8 per cent with several producers seeing their share prices increase. Alamos Gold Inc. and Torex Gold Resources Inc. were each up more than 11 per cent.
The June gold contract was up US$50.50 at US$1,738.30 an ounce and the May copper contract was up 6.05 cents at about US$2.29 a pound.
Ten of the 11 major sectors on the TSX were higher, led energy and materials. Real estate slipped slightly.
The S&P/TSX composite index closed up 348.10 points or 2.5 per cent at 14,288.16. That was a partial recovery from Tuesday's 448-point loss
In New York, U.S. stock markets rose for the first time of the week as the Dow Jones industrial average was up 456.94 points at 23,475.82. The S&P 500 index gained 62.75 points at 2,799.31, while the Nasdaq composite climbed 232.15 points at 8,495.38.
The Canadian dollar traded for 70.65 cents US compared with an average of 70.41 cents US on Tuesday.
Market sentiment was also helped by some optimism about COVID-19 despite second waves in some countries and U.S. health officials pointing to the risk of that happening in the world's hardest-hit country.
"We're definitely not out of the woods, by any means, but a bit of light at the end of the tunnel ... is kind of how the market is looking at it, at least today," Greenberg said.
He pointed to the flattening of the curve with some countries reaching peak infections.
"So you're maybe seeing a little bit of the market looking a little bit down the tube of, at some point, people getting back out of their houses and getting back to work and things like that."
This report by The Canadian Press was first published April 22, 2020.
Companies in this story: (TSX:SES, TSX:VII, TSX:CVE, TSX:AGI, TSX:TXG, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press
