TSX posts record gain on U.S. economic hope
Last Updated: Tuesday, October 14, 2008 | 5:41 PM ET
CBC News
An electronic board shows the TSX composite index at the close of trading Tuesday. (Robin Rowland/CBC)Canada's TSX posted a record one-day gain on Tuesday as the country's main exchange gained almost 900 points in trading, a jump of almost 10 per cent.
The TSX closed the day up 890.50 points, or 9.82 per cent, to end the session at 9,955.66.
That was the best single-day showing in its history, beating Sept. 9, 2008, when the index gained 848.42 points, or 7.03 per cent, according to the TSX.
In the United States, the Dow Jones industrial index lost ground, declining 76.62 points, or 0.82 per cent, to close at 9,310.99.
Mother of all roller-coasters
But TSX up, Dow down does not really describe the entire gut-wrenching story of Tuesday's market trading.
Both Toronto's TSX and New York's Dow Jones index popped to almost unheard of gains as equity markets opened Tuesday morning.
By the end of the session, however, Canada's most important exchange had given back more than 50 per cent of the early gains while the Dow Jones actually lost ground.
The TSX was up a jaw-dropping 1,600 points as the morning bell rang in stock trading.
The Dow was up a more modest 233 points in the morning, modest at least compared with Monday's record 936-point spike.
Bush-based optimism
Both markets were reacting to the improved global economic prospects after U.S. President George Bush announced another rescue package for financial institutions, this one including $250 billion in public cash to buy shares in the country's largest banks.
Analysts said the weaker Tuesday showing for the Dow might be the result of technical moves among traders, such as profit-taking or short covering, rather than a fundamental shift in investor sentiment.
Other market watchers said that the original burst of equity optimism in response to Bush's announcement might have been overdone.
"The most important thing to realize [after the] relief trade is that the economy is going to get worse before it gets better," said Josh Stiles, senior bond strategist at IDEAglobal.
"We have a lot of bad data ahead, so I think we are more likely to be carving out a multi-month range here," he said.
An electronic board shows New York's Dow Jones index after the close of trading Tuesday. (Robin Rowland/CBC) Turbocharged global markets
Analysts pointed out that Canada's strong day was playing catch-up to the outstanding performance results in New York on Monday.
While the Canadian markets were closed for the country's Thanksgiving, the New York index jumped more than 936 points on the week's first trading session, partially reflecting improved feelings about the economy as word leaked out that Washington wanted to invest directly in the country's distressed financial sector.
The Bank of Canada said it "strongly welcomes the decisive actions announced today by the U.S. authorities," and Canada's economy and financial system "will benefit directly."
Loonie ride
Trading on foreign markets indicated the level of hope springing from Washington's assistance packages.
On overnight trading Monday, the London FTSE index gained 3.23 per cent, the CAC 40 was up 2.75 per cent and Germany's DAX rose 2.70 per cent.
The Canadian dollar swung up and down during the day, finally closing at 86.09 cents US, a gain of 1.4 cents from Monday.
Oil prices also wound up trading lower. The price for a barrel of oil for November delivery was down $2.56, at $78.63.
With files from the Associated Press
