Stock markets surge as China unlocks currency

The Toronto Stock Exchange, along with markets around the world, surged Monday as China signalled confidence in the world economy by making its currency more flexible in comparison to the U.S. dollar.

At midday, the S&P/TSX composite index was up about 120 points, or 0.9 per cent, to 12,045, with energy stocks leading the way as oil prices shot up. Financials were also a major booster.

The People’s Bank of China said it would end its measure, adopted during the financial crisis, of pegging the yuan relatively tightly to the U.S. currency, given improved condition of the global economy and its own.

On the New York Mercantile Exchange, crude oil was up $1.42 to $78.60 U.S. a barrel, while gold was down $4.30 to $1,254 U.S. an ounce.

The Canadian dollar was up 18 basis points to 98.10 cents U.S..

U.S. markets were also up strongly. The Dow Jones industrial average was ahead by about 100 points, or 0.9 per cent, to 10,550 at midday. The Nasdaq composite index was up around 15 points, or 0.5 per cent, to 2,325.

Overseas markets also rose, particularly in Asia where Japan’s Nikkei was up 2.43 per cent and Hong Kong’s Hang Seng index rose 3.08 per cent.