TORONTO -- Global markets got a boost Wednesday from strong U.S. corporate earnings, hopes for a Chinese trade deal and the U.S. Federal Reserve voicing an even more dovish approach to interest rate hikes.
The mood in markets was largely optimistic, reinforcing investors' appetite for risk, says Candice Bangsund, portfolio manager for Fiera Capital.
The day started with stronger-than-expected results by "big hitters" such as Boeing and Apple after markets closed on Tuesday. It was then reinforced by comments following Federal Reserve meetings, she said.
"They essentially alleviated any sort of fear of an aggressive path to rate hikes by really emphasizing that message of patience and flexibility and largely data dependent," she said in an interview.
By removing references to further rate hikes, the central bank indicated that it's not going to move prematurely on raising interest rates.
"What this has done has helped to ease financial market conditions and accordingly volatility and boosted equity prices, specifically in the U.S. but globally as well."
The S&P/TSX composite index closed up 21.41 points to 15,484.55 after hitting a high of 15,520.91.
The influential energy and materials sectors led the way on higher crude oil and gold prices. Crude rose as U.S. sanctions against Venezuela threatened to disrupt the global supply backdrop while gold got a boost from a weakened U.S. dollar.
The Canadian dollar traded at an average of 75.80 cents US, its highest level in about two months, and compared with an average of 75.38 cents US on Tuesday.
The March crude contract was up 92 cents US at US$54.23 per barrel and the March natural gas contract was down 4.9 cents at US$2.85 per mmBTU.
The April gold contract was up 30 cents US at US$1,315.50 an ounce and the March copper contract was up 4.25 cents at US$2.77 a pound.
In New York, the Dow Jones industrial average was up 434.90 points to 25,014.86. The S&P 500 index was up 41.05 points at 2,681.05, while the Nasdaq composite was up 154.79 points at 7,183.08.
Bangsund added that markets were helped by renewed optimism for some sort of clarity or diffused tension ahead as U.S. and Chinese trade negotiators have begun to meet.
"If we do get some sort of news of a de-escalation in the trade debacle between the U.S. and China that would remove a key overhang, a key risk from the equity outlook and would help to place a floor under equity markets broadly."
