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Canada’s main stock index opened higher on Wednesday, lifted by energy shares which tracked higher oil prices, while hopes that the coronavirus outbreak could be peaking in the United States helped broader sentiment.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 120.42 points, or 0.88%, at 13,734.56.
Wall Street’s main indexes opened higher on Wednesday for the third straight session, on hopes that the coronavirus outbreak in the United States was nearing its peak and expectations the Congress will push through more aid for the battered economy.
The Dow Jones Industrial Average rose 239.61 points, or 1.06%, at the open to 22,893.47.
The S&P 500 opened higher by 25.59 points, or 0.96%, at 2,685.00. The Nasdaq Composite gained 88.46 points, or 1.12%, to 7,975.72 at the opening bell.
President Donald Trump said late on Tuesday that the United States might be getting to the top of the “curve” of the outbreak, even as New York and several other states posted their highest number of daily virus-related fatalities.
“Traders are trying to pick a bottom in shares and scientists are trying to pick the peak in the pandemic. Both exercises typically result in a lot of false starts before the real thing,” Jasper Lawler, head of research at London Capital Group said.
Sentiment also got a lift as Democratic leaders in Congress threw their support behind interim emergency funding, a day after the Trump administration asked lawmakers for $250 billion in aid for small businesses hit by the pandemic.
The package would add to the $2.3 trillion in stimulus already approved and meant to make up for the wages and incomes lost after Americans were ordered to stay home to control the spread of the virus.
Those measures have brought the economy to a virtual halt, with the benchmark S&P 500 down nearly 22%, or about $6 trillion in market value, from its record high in mid-February, despite the recent gains.
In Asia, Japan’s state of emergency kicked in and focused on seven urban areas, including Tokyo, with strong government requests for people to stay home and restaurants and stores to close for a month. It was unclear how effective the entirely voluntary measures would be.
Japan’s Nikkei 225 gained 2.1% to 19,353.24, on stronger than expected machinery orders.
Goldman Sachs said in a report that Japan’s economy is headed to a record 25% contraction in the current quarter, with exports diving by 60% in the April-June period. The contraction for the world’s third largest economy would be a record, since GDP, or gross domestic product, began to be tracked in 1955.
Japan’s economic activity will likely recover with the third quarter and GDP is expected to grow 3.1% in 2021, it said.
Benchmark U.S. crude oil rose 81 cents to $24.44 a barrel Wednesday in electronic trading on the New York Mercantile Exchange. It got a boost from comments by President Donald Trump to Fox TV that he expects Russia and Saudi Arabia to resolve their price war. U.S. crude had fallen $2.45, or 9.4%, to settle at $23.63 per barrel Tuesday.
Brent crude, the international standard, gained 16 cents to $32.03 on Wednesday.
While many investors are preoccupied with the pandemic, energy remains another major factor driving trading.
The meeting of the so-called OPEC+ is due to be held on Thursday. It was delayed amid bickering between Saudi Arabia and Russia following a meeting in March where OPEC and other nations led by Russia failed to agree to a production cut to reflect collapsing demand due to the pandemic. Prices then plunged.
Even Thursday’s meeting was in doubt after Iran demanded greater clarity on the scale of U.S. oil production before talks can start.
For “more immediate market stability concerns, all eyes and ears remain trained on the success of the OPEC+ meeting on Thursday,” Stephen Innes of AxiCorp said in a commentary.
In other Asian trading, Australia’s S&P/ASX 200 shed nearly 0.9% to 5,206.90, while South Korea’s Kospi lost 0.9% to 1,807.14. Hong Kong’s Hang Seng fell 1.2% to 23,970.37 and the Shanghai Composite dipped 0.2% to 2,815.37.
India’s Sensex lost 0.6%. Shares rose in Taiwan and Malaysia but fell in other Southeast Asian markets.
Even though economists say a punishing recession is inevitable, some investors are hoping a peak in new infections might provide clues about how long and durable the downturn might be.
Reuters and The Associated Press
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