TORONTO -- So far so good. After losing 35% in 2008 for its worst year since 1931, Canada's main exchange began the New Year with a resounding bang on strength in energy and resource stocks that were boosted by rallying commodity prices.
The S&P/TSX Composite closed up 246.41 points or 2.74% to 9,234.11, representing the best first day of the year since at least 1977. For the week, Canadian stocks climbed a tidy 11% from its close on Christmas Eve of 8,310.55. The TSX Venture closed up 49.67 or 6% to 846.69, while the Canadian dollar edged up 16 basis points to US82.26¢.
"Equity markets have started off the new trading year on a positive note, suggesting that some investors may be ready to turn the page on 2008 and seem to be starting to look to the future with something other than fear or dread," said Colin Cieszynski, market analyst with CMC Markets Canada.
That said, Mr. Cieszynski believes more tough times may lie ahead and he expects to get a better read on things starting next week when volumes return to normal after two weeks of thin trading due to the holidays.
"Investors may be looking to Monday's trading when everyone is expected to be back, for insight into which market trends may be developing for the first part of the year," he said.
Energy stocks led the charge Friday, as oil continues its recent surge, climbing US$1.74 a barrel to US$46.34. Crude has now risen 36% since hitting a low of US$33.87 on Dec. 19.
The S&P energy subindex was up 125.17 points to 2240.26 with Petro-Canada rising almost 9% to $29.10 and Canadian Natural Resources Ltd. up nearly 7% to $51.99.
Uranium stocks also continued their winning ways of late as investor confidence grows that uranium prices have stabilized. Uranium-oxide concentrate prices have climbed 15% since October and remained unchanged at US$52 per pound last week, according to a report from TradeTech LLC. Denison Mines Ltd. climbed 44% to $2.10 yesterday, while Cameco Corp. jumped 12% to $23.55.
The materials group was also up on the day, climbing 31.68 points to 2295.43 on a strong gains for base metal stocks buoyed by rising prices for copper and nickel, the latter up 9% to a two-month high. Gold prices, meanwhile, slumped US$4.80 to US$879.50.
In the United States, investors also enjoyed a solid start to the year with all three major indices ending in positive territory. The Dow Jones Industrial climbed 258.30 points or 2.94% to 9,034.69 and was up 6% on the week. The S&P 500 had its best start a year since 2003, closing up 28.55 points or 3.16% to 931.80 and the NASDAQ Composite Index increased 55.18 points or 3.50% to 1632.21.