A street sign along Bay Street in Toronto's financial district is shown in Toronto on Tuesday, January 12, 2021. THE CANADIAN PRESS/Nathan Denette

Broad rally led by tech lifts S&P/TSX composite to record high

Broad rally led by tech lifts S&P/TSX composite to record high

TORONTO — A broad-based rally led by technology lifted Canada’s main stock index to a record high and cushioned the blow to the energy and materials sectors from possible progress in talks between Russia and Ukraine.

Russia suggesting it was moving its military away from Kyiv has also helped to give the market a boost, said Colin Cieszynski, chief market strategist at SIA Wealth Management.

“Europe finished with very good gains today and the U.S. accelerated through the day,” he said in an interview.

The S&P/TSX composite index was up 109.39 points to a record close of 22,087.22.

In New York, the Dow Jones industrial average was up 338.30 points at 35,294.19. The S&P 500 index was up 56.08 points at 4,631.60, while the Nasdaq composite was up 264.74 points at 14,619.64.

Cieszynski noted that the market movements were a reversal from where they have been, with areas that have done well lately, such as energy and materials, in a correction and those that have underperformed, such as small caps and technology, coming back.

“I wouldn’t necessarily say people have become extremely bullish, but it seems like some of the fears have gone away and some people are at least trying to do some bargain-hunting, picking up in areas that have become depressed,” he said.

Nine of the 11 major sectors on the TSX were higher, with technology leading. It was up 3.0 per cent as shares of Lightspeed Commerce Inc. climbed 8.3 per cent and Shopify Inc. was 5.8 per cent higher.

The sector bounced back after being severely depressed, helped by lower bond yields on the day.

“I don’t think anything fundamentally has changed in the technology sector. It’s just more a case of I was probably the most oversold,” Cieszynski said.

Health care rose 2.4 per cent while consumer discretionary increased 2.5 per cent.

Energy was down as crude energy prices fell on reported progress in talks to end the war in Ukraine with the head of the Russian delegation saying the latest meeting was a step toward compromise, although Vladimir Medinsky added that the two sides have a long way to go to reach an agreement.

The Toronto-based market has outpaced its U.S. counterparts because the invasion of Ukraine prompted oil prices to rise while gold has also appreciated.

Crude continued to be resilient, settling above US$100 per barrel after dipping as low as US$98.44 on Tuesday.

The May crude oil contract was down US$1.72 at US$104.24 per barrel and the May natural gas contract was down 20.8 cents at US$5.33 per mmBTU.

Shares of Parex Resources Inc. decreased 3.4 per cent while Freehold Royalties Ltd. was down 2.7 per cent.

The Canadian dollar traded for 79.94 cents US compared with 79.74 cents US on Monday.

The loonie appreciated along with other global currencies on weakness in the U.S. dollar.

Gold fell to a near two-week low as demand for safe havens faded.

“Some of the money, some of the capital that fled into gold is just coming back out and being put back to work in the regular equity markets,” Cieszynski said.

The June gold contract was down US$26.70 at US$1,918.00 an ounce and the May copper contract was up less than a penny at US$4.73 a pound.

Cieszynski warned that markets could reverse again quickly.

“Everything is just so volatile right now that it’s a great day and it’s encouraging, but we can’t say much more than that because who knows what’s going to happen overnight.”

This report by The Canadian Press was first published March 29, 2022.

Companies in this story: (TSX:FRU, TSX:PXT, TSX:LSPD, TSX:SHOP, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press

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