Canada’s main stock index opened higher on Tuesday led by a rally in energy stocks after oil prices gained following strength in global stocks and an unplanned supply cut in Libya.
The Toronto Stock Exchange’s S&P/TSX composite index was up 199.46 points, or 1.35 per cent, at 14,927.74.
U.S. stocks jumped at the open on Tuesday in broad-based gains led by industrial and technology stocks amid signs of progress in trade talks between the United States and China.
The Dow Jones Industrial Average rose 296.65 points, or 1.21 per cent, at the open to 24,719.91.
The S&P 500 opened higher by 26.72 points, or 1.01 per cent, at 2,664.44. The Nasdaq Composite gained 101.13 points, or 1.44 per cent, to 7,121.66 at the opening bell.
Boosting sentiment was President Donald Trump’s tweet that the ongoing negotiations were “very productive” and a report China was moving toward cutting its trade-war tariffs on American-made cars. Trump also tweeted that an “important announcement” is imminent.
The developments come as the two countries discussed a road map for the next stage of their trade talks.
Shares of U.S. automakers General Motors Co rose 3.5 per cent, while Ford Motor Co climbed 3.2 per cent in early trading.
Also gaining were shares of trade-sensitive Caterpillar Inc , which rose 2.9 per cent, while Boeing Co jumped 1.3 per cent, ahead of the release of its plane orders and delivery numbers for November.
Even after China and the United States agreed to a 90-day trade ceasefire on Dec. 1 for negotiations, investors have been skeptical of a resolution following the arrest of a top Huawei Technologies Co Ltd executive at U.S. request.
Wall Street is on track to add to Monday’s gains when the S&P 500 snapped a three-day losing streak after hitting an eight-month low on concerns over global growth and uncertainty over the Brexit deal.
Still, risks to global growth persist and the S&P 500 and the Dow Industrials remain in negative territory for the year, despite Monday’s gain.
A top International Monetary Fund official warned storm clouds were gathering over the global economy and governments and central banks might not be well-equipped to cope.
“This is a garden variety oversold bounce driven by headlines on China tariffs,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
“When you bounce from deeply oversold condition, the stuff that led down is the stuff that leads higher. So banks and tech might lead the way at least in the open,” he said.
Euro zone stocks rose 1.8 per cent and Germany’s DAX climbed 2 per cent while Britain’s FTSE 100 rose 1.6 per cent. Germany’s DAX, the most China-sensitive market in Europe, last week entered bear market territory.
MSCI’s world equity index gained 0.4 per cent - set for its first day of gains after a five-day losing streak. China’s blue-chip index had risen 0.5 per cent overnight.
Sterling, meanwhile, still floundered near 20-month lows as the market sought clarity on the next steps for Brexit after Britain’s prime minister postponed a vote on her deal.
Sterling hesitantly rose 0.4 per cent to $1.2610 as traders sought to price in a range of possibilities after Prime Minister Theresa May’s abrupt decision to postpone a parliamentary vote on her Brexit agreement on Monday, a move that sent the pound spiralling down to $1.2505.
Goldman Sachs analysts said volatility across UK assets has increased, with option markets pricing a wider range of outcomes including Brexit without a deal, a last-minute agreement or another referendum on EU membership.
“We still think a no deal is a very low probability, but the uncertainty will persist for some time,” said Richard Turnill, global chief investment strategist at Blackrock.
“The events of the last few days show you why there’s caution,” he added.
May embarked on the first leg of a trip to meet European leaders on Tuesday, seeking support for changes to her Brexit deal, while at home some lawmakers agitated for a vote of no confidence.
The EU was adamant the withdrawal agreement, including its most contentious element - a “backstop” for the Northern Ireland frontier - could not be renegotiated.
“I have no doubt a no-deal Brexit would rank pretty high on the list of market accidents ... and have a global impact,” said Andreas Utermann, CEO of Allianz Global Investors.
Bond markets were focused on France as investors fretted over fiscal spending after the government announced concessions aimed at defusing weeks of often violent protests.
President Emmanuel Macron announced wage rises for the poorest workers and tax cuts for pensioners.
This sent French bond yields to their highest level over Germany’s in 19 months, with the spread over the safe-haven German Bund hitting 48.5 basis points.
Macron’s announcement “leaves open the question about how the new fiscal measures will be covered financially,” wrote UniCredit analysts.
Olivier Dussopt, junior minister for public accounts, said on BFM TV the measures would cost 8-10 billion euros ($9.1-$11.4 billion).
The dollar index, which measures the U.S. dollar against a basket of major currencies, slipped 0.3 per cent to 97.078 .
In emerging markets, stocks rose 0.4 per cent from one-month lows hit on Monday.
The shock resignation of India’s central bank governor hurt India’s NSE share index initially, but it closed up 0.6 per cent, helped by election results in three states which were not as poor for the ruling party as some had expected.
Oil prices rebounded strongly from earlier losses, having sunk on Monday.
U.S. crude futures climbed 1.2 per cent to $51.61 and Brent futures rose 0.8 per cent to $60.47.
Reuters