World equity markets moved higher and oil prices stabilized on Wednesday on hopes the coronavirus pandemic is getting close to peaking and that more government stimulus measures could be on the way.
Canada’s main stock index rose on Wednesday, lifted by energy shares tracking stronger oil prices.
The Toronto Stock Exchange’s S&P/TSX composite index was up 311.57 points, or 2.29%, at 13,925.71.
The energy sector climbed 4.2% as oil prices strengthened, buoyed by hopes that OPEC and its allies will strike a production cut agreement, shrugging off bearish signals from surging U.S. crude inventories.
Brent crude was up $1, or 3%, at $32.87. U.S. West Texas Intermediate (WTI) crude rose $1.55 cents to $25.18 a barrel.
Crude has collapsed in 2020 because of a slide in demand due to the coronavirus pandemic and excess supply. Brent dropped to $21.65, its lowest since 2002, on March 30.
Thursday’s video conference meeting between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - a group known as OPEC+ - was expected to be more successful than their gathering in March, which ended in a failure to extend supply cuts and a price war between Saudi Arabia and Russia.
“The coming extraordinary producing-countries meeting is the only hope on the horizon for the market,” said Bjornar Tonhaugen of Rystad Energy.
“Nobody wants to go short ahead of what could be a ‘positive surprise’ by OPEC++.”
The TSX financials sector rose 2.6% and the industrials sector was up 2.7%.
The materials sector, which includes precious and base metals miners and fertilizer companies, rose 1.1%.
U.S. stock markets climbed on Wednesday as investors were encouraged by hopeful signs about the coronavirus outbreak in the United States, with health insurers getting an additional boost from the announcement that Democratic presidential candidate Bernie Sanders was suspending his campaign.
Stocks opened higher after President Donald Trump said Americans might be getting to the top of the “curve” in relation to the outbreak, and New York Governor Andrew Cuomo said the state’s efforts at social distancing were working in getting the virus under control.
“Stocks are celebrating good news on the coronavirus front, that is legitimate, that is fair and they probably should,” said Willie Delwiche, investment strategist at Baird in Milwaukee.
“It is going to be a slow process to get things going again but right now stocks are breathing a sigh of relief that maybe the models with death projections from a week or two weeks ago, maybe those aren’t going to pan out.”
The Dow Jones Industrial Average rose 779.71 points, or 3.44%, to 23,433.57, the S&P 500 gained 90.57 points, or 3.41%, to 2,749.98 and the Nasdaq Composite added 203.64 points, or 2.58%, to 8,090.90.
After the worst March performance for the S&P 500 in decades, the benchmark index has bounced back by about 22% the past two weeks, although its main indicator of future volatility remains historically high.
Stocks gained an additional lift as he healthcare sector gained ground in the wake of Sanders’ decision to drop his campaign for the White House. Sanders’ embrace of a Medicare for all healthcare policy would have essentially abolished private insurance and had cast a shadow over healthcare stocks for months.
Even with the big gains in recent weeks, in part due to massive fiscal and monetary stimulus measures, the S&P 500 is still down about 19% from its record high in mid-February, as measures to contain the virus brought the U.S. economy to a virtual halt.
The minutes from two emergency meetings of the Federal Reserve showed officials grew increasingly concerned by the swiftness with which the coronavirus outbreak was harming the U.S. economy and disrupting financial markets, prompting them to take “forceful action.”
Top U.S. Democrats in Congress said on Wednesday they would back the Trump administration’s request for $250 billion more in aid for small businesses if it includes additional money for hospitals, local governments and food assistance.
The package would add to the $2.3 trillion in stimulus already approved and meant to make up for the wages and incomes lost after Americans were ordered to stay home.
In Europe, stocks dipped after finance ministers clashed over a proposal to collectively combat the health crisis. Countries that have been hardest hit there by COVID-19 are also among those that can least afford to pay for it, such as Italy and Spain. But the outbreak is dragging on economies across the continent. German economists predict its economy will shrink 4.2% this year.
Germany’s DAX slipped 0.2%, and France’s CAC 40 rose 0.1%. The FTSE 100 in London lost 0.5%.
Trading in Asia was more mixed.
Japan’s Nikkei 225 rose 2.1%, while stocks in South Korea fell 0.9% and Hong Kong lost 1.2%.
Reuters and The Associated Press
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