TORONTO – The Toronto stock market racked up a triple digit boost Tuesday morning as investors regained some confidence about Europe’s economy and commodity stocks made significant strides.
The S&P/TSX composite index added 167.59 points to 11,707.29, with all sectors moving higher. The junior Venture Exchange was ahead 19.71 points to 1,427.1.
The Canadian dollar added 1.07 cents at 97.34 cents US after data showed Canada’s inflation was in line with expectations in November.
Canada’s annual inflation rate remained relatively high at 2.9 per cent last month as Canadians continued to pay considerably more for food and gasoline than they had 12 months earlier.
Statistics Canada said Tuesday that grocery prices were up 5.7 per cent in November compared with a year ago as consumers saw double-digit increases for such basics as fresh vegetables and bread. The figures included a 1.3 per cent jump from October alone.
Meanwhile, commodities made gains with the January oil contract adding US$3 to US$96.88 a barrel.
The February gold contract was up US$19 to US$1,615.70, while the March copper contract gained six cents to US$3.37.
On the TSX, the mining index was up 3.2 per cent and the energy and gold indexes pushed 2.5 per cent higher.
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Wall Street was also positive with the Dow Jones up 231.44 points at 11,997.7 while the broader S&P 500 was up 25.45 points at 1,230.8 and the Nasdaq up 56.54 points at 2,579.68.
The U.S. Commerce Department says builders broke ground on a seasonally adjusted annual rate of 685,000 homes last month, a 9.3 per cent jump from October. It’s the highest level since April 2010. Still, the rate is far below the 1.2 million homes that economists say would be built each year in a healthy housing market.
European markets advanced with Germany’s DAX up 2.9 per cent, while France’s CAC 40 added 2.3 per cent. The FTSE 100 index of leading British companies was up 0.7 per cent.
German business confidence rose unexpectedly in December, while German consumers were resilient in the face of rising economic risks and the ongoing debt crisis.
Spain’s weekly auction of short-term debt was also encouraging for investors. Borrowing costs for three- and six-month notes fell sharply amid strong demand, indicating market confidence in the country’s ability to handle its debt is recovering.
The reassuring macroeconomic news reinforced improving market sentiment as the leadership succession in North Korea appeared to be under control.
The possibility of a power struggle in a country pursuing nuclear weapons and known for its secrecy and unpredictability have heightened tensions in the region and unsettled markets on Monday.
In Asia, South Korea’s Kospi led regional gains, rising 0.9 per cent to close at 1,793.06 a day after tumbling 3.4 per cent on news of Kim’s death.
In domestic news, TransCanada Corporation (TSX:TRP), a major pipeline operator and power producer, has expanded its alternative energy business with a deal to buy nine solar power projects in Ontario for $470 million. Shares added 25 cents to $43.69.
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