A tote board TSX numbers in Toronto in this file photo.Frank Gunn/The Canadian Press
Canadian stocks rose a fourth day as commodities producers jumped with crude and precious metals in London, rebounding from losses sustained in the wake of the U.K.'s shock vote to exit the European Union.
The S&P/TSX Composite Index climbed 1.38 per cent, or 194.33 points, to 14,258.87 in Toronto, the highest level since June 9. Canadian markets were closed Friday for the Canada Day holiday.
The Canadian benchmark has swung wildly along with global markets, rebounding 4.2 per cent in four trading sessions after slumping the most since February in the two days after the Brexit vote. The S&P/TSX is neck-and-neck with New Zealand as the top-performing developed market in the world in 2016, according to data compiled by Bloomberg.
Raw-materials producers soared 4.4 per cent to lead broad gains across the S&P/TSX. Silver Wheaton Corp. and MAG Silver Corp. surged at least 6.8 per cent as silver vaulted above $21 for the first time in two years. Royal Bank of Canada and Toronto-Dominion Bank each increased 1.1 per cent to lead the nation's largest lenders higher.
Raw-materials producers have led the charge for Canada with a 58-per-cent gain this year, the best year-to-date performance for the industry in at least 30 years, according to data compiled by Bloomberg. Gold prices are on track for the biggest annual increase since 2010.
Silver touched a two-year high, while gold advanced to near a two-year high amid speculation of more central bank stimulus with traders now pricing in greater odds of a Federal Reserve rate cut than a hike.
Gold and other raw materials have advanced on speculation the U.K.'s June 23 vote to leave the EU will trigger further stimulus from the European Central Bank and Bank of Japan while reducing the chance that the Federal Reserve will raise interest rates this year. Global equities last week rallied by the most in four months as policy makers worldwide sought to reassure investors they would take steps to limit the economic fallout of so-called Brexit and ensure financial markets kept functioning. The securities tumbled by the most since 2008 on the day after Britain's referendum.
"Investment demand for metals continue on expectations of a dovish Fed, growth worries and central bank policies putting more and more sovereign bonds into negative yields," Ole Hansen, the head of commodity strategy at Denmark's Saxo Bank A/S, wrote in an e-mail. "The policies of the ECB and BOJ are already ultra loose and further stimulus could be added following the Brexit vote."
A BOJ report on Monday revealed the nation's companies cut their forecasts for inflation for five years' time, adding to pressure on the central bank to boost stimulus. In China, an official factory gauge retreated to the dividing line between improvement and deterioration last month, while a measure of services perked up, weekend data showed.
U.S. stock futures edged higher while the main financial markets were closed for the Fourth of July holiday. Some Middle Eastern markets will close this week for religious observances.
Silver soared as much as 7 per cent, its biggest intra-day gain since 2014, before paring its advance to 2.7 per cent as it traded at $20.299 in New York. Holdings in silver-backed exchange traded funds expanded to a record last month, and assets in gold ETFs are now at the highest since August 2013 as investors bet on a continued low-yield environment. Gold bullion rose 0.6 per cent on Monday.
"Brexit has created all sorts of fear and loathing across markets," Commonwealth Bank of Australia analysts including Tobin Gorey, wrote in a note, adding that investors are cutting back on risk. "Gold and silver, as we would expect, benefit the most from safe-haven demand flows."
Nickel, which is used in the production of stainless steel, rose 2.3 per cent to more than $10,000 a ton in London. It surged 5.6 per cent on Friday after the Philippines announced its audit plans, threatening to curb supplies from the southeast Asian country. Less than a third of miners operating in the nation are compliant with international standards for responsible mining, according to the government.
The Stoxx 600 slipped 0.7 per cent, after posting is biggest four-day rally since February. The volume of shares changing hands was about 30 per cent lower than the 30-day average, with the U.S. market closed for the Independence Day holiday. S&P 500 Index futures gained 0.2 per cent.
The U.K.'s FTSE 100 Index lost 0.8 per cent. The gauge of megacaps is close to entering a bull market, boosted by a weaker pound and a rally in miners of precious metals. Glencore PLC climbed 4.4 per cent on Monday.
Brent crude closed near $50 a barrel as Nigerian output rose last month following repairs to some infrastructure that had been damaged by militant attacks.
Brent fell 0.5 per cent, paring earlier gains. The African country pumped an average 1.53 million barrels a day last month, an increase of about 90,000 a day from May, according to a Bloomberg survey. The global benchmark rose earlier as the Niger Delta Avengers said they attacked five crude-pumping facilities overnight Sunday. Nigerian oil workers plan to begin a strike July 7 to protest job losses and delays in passing a new oil law.
"There is not much volume and the news out of Nigeria is far from decisive," said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Fla. "The markets are pretty much just waiting."
Brent for September settlement lost 25 cents to $50.10 a barrel on the London-based ICE Futures Europe exchange. The contract had advanced 64 cents to $50.35 a barrel on Friday.
West Texas Intermediate for August delivery fell 23 cents, or 0.5 per cent, to $48.76 a barrel on the New York Mercantile Exchange. Total volume of WTI futures traded Monday - Independence Day in the U.S. - was about 80 percent below the 100-day average. There was no settlement because of the holiday.
Crude prices have risen this year, with Brent gaining about 80 per cent from a 12-year low in January, amid supply disruptions and falling U.S. output. Pledges from central banks halted a rout in global markets following the U.K. decision to leave the European Union. Both the International Energy Agency and Organization of Petroleum Exporting Countries forecast that supply and demand are returning to balance.