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Canada’s main stock index rose on Thursday, led by energy shares as oil prices soared on Thursday after U.S. President Donald Trump said he expects Russia and Saudi Arabia to announce a major oil production cut, and Saudi state media said the kingdom was calling an emergency meeting of oil producers to deal with the market turmoil.
At 11:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite index was up 210.24 points, or 1.63%, at 13,090.93.
Eight of the index’s 11 major sectors were higher, led by the energy sector, which climbed 12.2%.
Trump said he had spoken to Saudi Crown Prince Mohammed bin Salman, and expects Saudi Arabia and Russia to cut oil output by about 10 million barrels, as the two countries signaled willingness to make a deal.
That set off a swift rally in oil markets, with Brent futures jumping $6.28, or 25%, to $31.02 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $5.65, or 28%, to $25.96.
Earlier in the session, Brent soared as much as 47%, its highest gain ever. WTI, meanwhile, jumped as much as 35%, which was it second highest ever following an intraday gain of 36% on March 19.
The financials sector gained 1.2%. The industrials sector rose 0.8%.
The materials sector, added 5.3% as gold futures rose 1%.
Wall Street bounced on Thursday as a recovery in oil prices outweighed the shock of weekly jobless claims soaring past 6 million.
Initial claims for unemployment benefits last week exceeded the top end of analysts’ estimates at 5.25 million, and U.S. President Donald Trump has warned of more economic pain as more states enforce sweeping stay-at-home orders to curtail the coronavirus pandemic.
“The U.S. labor market has never experienced such a disruption,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.
“Most will likely say the United States is sitting squarely in a recession right now, but the real question at hand is for how long and to what extent.”
The Dow Jones and S&P 500, still fresh from their worst opening quarters in history, were lifted by a surge in oil prices as Saudi Arabia and Russia signaled they were ready to co-operate to help stabilize the market.
The energy index, which has lost half its value this year partly due to their price war, jumped 13% with Exxon Mobil Corp and Chevron Corp posting the biggest gains among Dow components.
But analysts predict further declines for U.S. equity markets as more companies announce production cuts and withdraw financial forecasts ahead of the earnings season.
Reuters
