Greenspan Boosts Stocks
March 30, 2011
The Toronto Stock Exchange 300 Composite Index rose 66.94 to 5006.94, after rising 19.41 Wednesday. Advancing issues beat decliners, 544 to 283. Volume was 69.3 million shares valued at $1.14 billion Canadian, up from Wednesday's 65.2 million shares valued at C$1.04 billion. Toronto slightly underperformed New York, where the Dow Jones Industrial Average rose 87.30 to 5464.18. All 14 of the TSE's stock sub-indexes rose, reflecting reduced fears over inflation and the negative impact it can have on the economy. The financial-services sector in particular had a strong day, rising 1.98%, on the combination of Mr. Halina's inflation outlook and Toronto-Dominion Bank's massive buyback plan of up to 30 million of its common shares. With Mr. Halina indicating that inflation appears under control, interest-rate fears in the bond and equity markets dissipated. In turn, bond prices rose on the day, taking banks stocks with them in traditional fashion. Furthermore, Toronto-Dominion's buyback plan signaled to equity investors that other banks might follow suit to enhance shareholder value, observers say. Toronto-Dominion's stock surged 1.30 to 25.30. Besides reduced interest-rate fears, Toronto's overall gain also reflects ``a fairly (typical) rally after a normal correction,'' said Nygaard Klingensmith, portfolio strategist at CIBC Wood Gundy Securities Inc. ``You don't want to read too much into today,'' Mr. Klingensmith said. The performance of gold stocks seems to support this view. The gold sub-index surged 2.05%, despite reduced fears over inflation and a sluggish gold price. Typically, bullion stocks would suffer in this kind of environment. But Mr. Klingensmith points out that some gold stocks have dropped 25% over the past few months, hence the sector's rebound Thursday.
