Toronto market climbs to 4-week high as Omicron fears recede

·2 min read
FILE PHOTO: A sign board displaying Toronto Stock Exchange stock information is seen in Toronto

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index rose for a third day on Thursday, as optimism that the Omicron variant of the coronavirus was less severe than feared bolstered commodity prices and data showed that the domestic economy likely grew in November.

The Toronto Stock Exchange's S&P/TSX composite index ended up 148.88 points, or 0.7%, at 21,218.93, adding to gains on Tuesday and Wednesday and its highest closing level since Nov. 25.

Wall Street's main indexes also rose after more encouraging developments about the impact of the Omicron variant.

"People are starting to realize the Omicron variant is not as bad as some of the other waves we've had," said Gregory Taylor, portfolio manager at Purpose Investments.

"So we're starting to see recovery in the commodities and investor sentiment, which really has been hurt earlier in the month."

The risk of needing to stay in hospital for patients with the Omicron variant is 40% to 45% lower than for patients with the Delta variant, according to research by London's Imperial College published on Wednesday.

Also welcome was a preliminary estimate showing that the Canadian economy grew 0.3% in November, its sixth consecutive month of expansion.

"Canada's economy was doing rather well at least in the pre-Omicron world," Derek Holt, head of capital markets economics at Scotiabank, said in a note.

The heavily-weighted financial services sector advanced 0.8%, helped by a 13.4% jump in the shares of ECN Capital Corp. Technology was up 1.5%.

U.S. crude oil futures settled 1.4% higher at $73.79 a barrel, helping energy shares hang on to much of this week's rally.

The materials group, which includes precious and base metals miners and fertilizer companies, added 0.5%.

(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Alistair Bell)

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