North American stock markets and oil prices moved solidly higher Thursday, putting at least a temporary stop to the steady losses that have plagued those markets lately.
The benchmark stock index in Toronto, the S&P/TSX composite index, ended the day with a gain of 166 points, or 1.4 per cent, at 12,336, led by a 3.9 per cent rise in energy stocks.
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Even with Thursday's triple-digit gain, the Toronto index has fallen by 5.6 per cent since the start of the year.
In New York, the market staged an equally impressive rebound. The Dow Jones industrial average surged 228 points, or 1.4 per cent, to 16,433, led by gains in ExxonMobil and Chevron shares. The broader S&P 500 index jumped 1.7 per cent to 1,922. it was the best one-day gain for both indexes since Dec. 4.
Major U.S. indexes fell to 3½-month lows on Wednesday.
"It's been pretty ugly so far, year-to-date, and it's good to see the gains, but we'll see if they follow through tomorrow," said Sean Lynch, co-head of global equity for Wells Fargo Investment Institute.
The loonie closed at 69.63 cents US, down 0.08 cents from Wednesday's close. Earlier in the day, it had traded as low as 69.46 cents US.
The dollar moved lower despite a rebound for oil, which gained 72 cents a barrel to settle at $31.20 US in New York trading. Oil has been testing 12-year lows this week. Benchmark Brent crude also rose.
Rate cut bandwagon growing
Fourteen of 27 economists Bloomberg surveyed are now predicting that the Bank of Canada will cut its key lending rate by another quarter of a percentage point — to 0.25 per cent — at its Jan. 20 meeting.
Economists at CIBC and BMO on Thursday became the latest to join the rate-cut camp.
"The commodity sector's pain is spreading to the domestically-focused, non-resource parts of the economy, trumping the gains in non-commodity exports to the U.S.," BMO said in a morning research note.
Bloomberg says trading in overnight money markets shows investors are putting the odds of a rate cut at about 50 per cent. The odds were 16 per cent a month ago.