TSX, Dow rise at close of worst quarter since 2011
Stock markets are at a two-year low and investors are looking for bargains
Stock markets finished a dismal third quarter of the year on an upbeat note, with the TSX and Dow up by triple digits on Wednesday.
The loonie moved higher and some commodities, such as copper and aluminum made gains. Oil futures fell slightly.
Positive GDP numbers for July helped contribute to the advance in Toronto.
A poll of analysts by Reuters showed many of them expect the TSX to end the year lower than it started.
"Slow growth is coming to Canada with the potential for further decay in the commodity space," said Jay Bryant, from MacNicol and Associates. "This will mute returns."
New York's Dow Jones industrial average rose 235 points to 16,284 and the S&P 500 index was up 35 points at 1920. Like the TSX, they've just endured the worst quarter since 2011.
Worst quarter since 2011
The pain was triggered by the devaluation of the Chinese yuan and the apparent slowdown in the Chinese economy, which could dramatically lower demand for commodities.
The third quarter brought traders:
- A drop of 8.5 per cent for the TSX.
- A drop of 7.5 per cent for the Dow.
- A fall of 7.3 per cent for the S&P index.
- A drop of 10 per cent for overall global stocks.
- A rout of 14 per cent in commodity prices.
Part of today's gains is due to traders looking for bargains among beaten-down stocks.
Pension fund managers are also shifting money into stocks as they close out their positions for the end of the quarter.
Markets in North America are following global stocks higher, with the optimism beginning in Shanghai, where the stock index was up 14.6 per cent today.
Stock gains around the world
Japan's Nikkei 225 surged 2.7 per cent amid expectations that policymakers will release more monetary and fiscal stimulus following weakness in recent economic data.
"The real question is not if more stimulus may be expected, but rather, how much stimulus will be rolled out, and when," Mizuho Bank said in a daily note.
Stocks in Europe followed, with London up 2.6 per cent, Germany up 2.2 per cent and all-Europe Stoxx index rising 2.23 per cent.
Glencore, the mining and commodities stock which had weighed down London's FTSE in recent days, rose 14 per cent today after executives gave a statement about the company's cash situation.
In Germany, Volkswagen also rose after announcing a recall on Tuesday.
Loonie moves higher
The Canadian dollar rose two-fifths of a cent to close at 74.93 cents US.
Oil fell in the afternoon after the Energy Information Agency report on oil stocks showed a rise in overall crude inventories but a fall in crude in storage at Cushing, Oklahoma.
West Texas Intermediate crude ended the trading day down 14 cents at $45.09 US a barrel.
News that Russian bombs had fallen in western Syria and the approach of Hurricane Joaquin towards the U.S. helped to keep oil prices from falling further.