North American stocks shot higher out of the gate on Wednesday, buoyed by hopes that the Chinese government is prepared to step up efforts to kick-start growth in the world’s second-largest economy.
The S&P/TSX composite index of Canadian shares rose 116.26 points, or 0.85 per cent, at the opening bell. In New York, the Dow Jones industrial average rose 157.14 points (1.0 per cent), while the S&P 500 was up 17.4 points (0.9 per cent).
The Canadian dollar was down nearly one-fifth of a U.S. cent early Wednesday, falling 0.17 of a U.S. cent to 75.56 cents US.
A day earlier, the S&P/TSX index in Toronto rose 152.36 points to close at 13,630.67, with the metals and mining sector by far the biggest gainer.
MORE: Most Canadian investors have stayed course during wild market swings, poll says
Global rally
Japanese stocks posted their biggest gain in nearly seven years Wednesday, leading other regional indexes higher, as Asian officials sought to counter pessimism about prospects for markets and economic growth.
Japan’s Nikkei 225 index vaulted 7.7 per cent to 18,770.51, its biggest one-day rise since October 2008 and its 10th biggest gain since 1949. South Korea’s Kospi added 3 per cent to 1,934.20 and Hong Kong’s Hang Seng climbed 4.5 per cent to 21,211.17.
The strong gains come after three months of weak performance in share markets that was partly sparked by the dramatic sell-off in Chinese shares beginning in early June.
The Shanghai Composite Index in mainland China rose 2.3 per cent to 3,243.09. Australia’s S&P/ASX 200 gained 2.1 per cent to 5,221.10.
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Asian stimulus
The Nikkei, which had earlier hit its lowest level since February, bounced after comments by Prime Minister Shinzo Abe raised expectations of more measures to shore up economic growth under his “Abenomics” stimulus program.
In remarks from Abe read to a Bank of America-Merrill Lynch conference in Tokyo, he pledged to cut corporate tax rates by at least 3.3 percentage points next year and passage legislation making it easier to hire temporary workers.
China’s Ministry of Finance helped with a new round of measures to revive growth.
The steps, which include infrastructure spending and reforming taxes for small businesses, follow other recent moves aimed at soothing jittery markets. A rebound in Shanghai shares Tuesday also reinforced faith in Beijing’s interventionist policies to halt sliding prices.\
— With files from The Associated Press and Global News
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