The Toronto Stock Exchange was trading at levels not seen in nearly six years on Monday as violence in Iraq pushed up the price of oil and other commodities.
The TSX S&P/TSX composite index added 72.96 points to 15,074.57, about a point above its all-time close of 15,073 set June 18, 2008, just before the 2008-09 recession that sent stocks plummeting.
Meanwhile, the Canadian dollar was up 0.02 of a cent to 92.13 cents (U.S.) ahead of a two-day meeting of the U.S. Federal Reserve, which begins Tuesday.
On Wednesday, the U.S. central bank will deliver an economic outlook and decide whether it will continue to dial back its massive bond purchases – a stimulus program that has long helped support equities markets.
The central bank is expected to reduce its massive bond buyback program by a further $10-billion to $35-billion (U.S.) a month on signs of an improving economy.
Chris King of Morgan Meighen and Associates said Fed chair Janet Yellen is unlikely to announce any surprise moves. “(The Fed) doesn’t want to disrupt the steady progress that is being made,” said King, a vice-president and portfolio manager.
“The concern is that investors and the Main Street psyche is still quite weak and the economy runs on confidence. The biggest risk would be the economy, so they have got to keep confidence in the markets sustainable.”
U.S. indexes were also up as the Dow Jones industrials gained 16.55 points to 16,792.29, the Nasdaq added 8.15 points to 4,318.80 and the S&P 500 climbed 2.54 points to 1,938.70.
Wall Street found support even as the International Monetary Fund issued a new forecast predicting the U.S. economy will grow at a modest two per cent this year, below its previous estimate of 2.7 per cent.
The IMF noted that a brutal winter and a slowing housing recovery caused the economy to shrink over the first three months of 2014. The lower growth forecast comes amid a similar move by the World Bank, which cut its 2014 global growth forecast to 2.8 per cent from 3.2 per cent, citing weather conditions and the political crisis in Ukraine.