Figures showing that the Chinese economy is on track for solid growth gave the Toronto stock market a sharp boost on Wednesday.
The S&P/TSX composite index ran ahead 130.39 points to 15,211.71 after data showed that the annual pace of Chinese economic growth rose to 7.5 per cent in the three months ended June 30, up from the previous quarter’s 7.4 per cent.
The report was in line with the ruling Communist Party’s 7.5 per cent target for the year and higher than expectations for a 7.4 per cent advance.
“We haven’t had really good news out of China for awhile and this really reassured the market that China at the very least, it’s stopped its economic slide,” said Luciano Orengo, portfolio manager at Manulife Asset Management.
“You get this news combined with news from the U.S. where companies have started releasing earnings and for the most part have been better than expected and that’s (also) given the markets reassurance because a lot of the market appreciation has been due to multiple expansion and to keep the market going you need to see earnings growth.”
The Canadian dollar rose 0.01 of a cent to 92.96 cents (U.S.) as the Bank of Canada said it was keeping its key rate unchanged at one per cent.
The bank also said the economy is not doing as well as expected and trimmed growth projections for 2014 and 2015 by one-tenth of a point – to 2.2 and 2.4 per cent respectively.
U.S. markets were higher amid earnings reports from Bank of America and Yahoo along with word that Time Warner Inc. rejected a $80-billion (U.S.) buyout offer from Rupert Murdoch’s Twenty-First Century Fox Inc.
The Dow Jones industrials gained 40.96 points to 17,101.64, the Nasdaq rose 14.14 points to 4,430.53 while the S&P 500 index climbed 5.07 points to 1,978.35.
Bank of America fell two per cent, to $15.50 after reporting second-quarter earnings that were hit by higher litigation expenses. The bank earned 19 cents per share compared with 32 cents a year ago.
Yahoo earned $270-million, or 26 cents per share, in the March-June quarter. That’s down from $331-million, or 30 cents per share, a year ago. Adjusted earnings were 37 cents per share in the latest quarter, two cents short of estimates and its shares declined 4.72 per cent to $33.93.
The base metals sector gained 0.8 per cent while September copper was off a penny at $3.23 (U.S.) a pound.
The gold sector was up 1.84 per cent while August bullion edged up $6 to $1,303.10 an ounce.
August crude gained gained 98 cents to $100.94 a barrel and the energy sector rose 1.12 per cent.
The tech sector was the only decliner with BlackBerry down $1.16 or 9.56 per cent to $10.98 after Apple and IBM said they were teaming up in order to develop enterprise apps and cloud services on mobile, while infringing on BlackBerry’s mobile device management territory.