The Toronto Stock Exchange closed Thursday on a positive note, boosted by a strong showing by financial stocks.
After lower energy stocks set caused a sharp drop on Wednesday's index, the TSX closed Thursday up 66.26 points at 12,775.64.
BNN's Michael Hainsworth told 麻豆影视net that the TSX's improvement over Wednesday's sharp decline was based on a re-evaluation of Canada's financial stocks.
He said the Bank of Montreal (TSX:BMO) put behind it a potential $850 million write-down by bailing out two of its key commercial paper trusts.
"People thought, 'maybe things aren't so bad in the financial sector,'" Hainsworth said.
The financial sector reversed a long string of losses for the week, squeezing out a gain of 1.5 per cent.
"We're seeing the safe haven status of commodities erode a little here," said John Johnston, chief strategist, The Harbour Group at RBC Dominion Securities.
"We're seeing more of a sector rotation in the market out of resources back into financials and maybe consumer discretionary which are going to respond to (lower) interest rates."
Loonie drops
But the loonie continued to tumble Thursday, closing down 0.78 cents to 97.71 cents US -- it's lowest since mid-January. The loonie dropped 3.6 per cent this week, its second biggest weekly drop ever.
The sell-off may have to do with investors getting out of commodities before the long Easter weekend, but some economists think the loonie might have more fundamental problems.
TD Bank's Don Drummond says the world's economic outlook has darkened considerably as the American economy is now not expected to recover fully until the second half of 2009.
The bank downgraded the forecast for both the Canadian and U-S economies this year to 1.1 per cent.
On CTV's Mike Duffy Live, author and historian Michael Bliss called the current state of the market the "worst financial crisis since 1931."
However, TD Waterhouse economist Patricia Lovett-Reid disagreed with that assessment and said that investors should remain "patient and prudent."
Falling commodities
The energy sector fell 4.9 per cent for the week, with gold down 13 per cent and base metals, 6.5 per cent.
"Even among the wild swings we've seen in all sorts of markets since the credit crisis really broke, I'd say this week's move in commodities ranks right up there with some of the most impressive,'' Bank of Montreal economist Doug Porter told The Canadian Press Thursday.
"We do think commodities got ahead of themselves, got ahead of the fundamentals, and more broadly speaking we're calling for a bit further of a pullback.''
The TSX Venture Exchange was down 22.66 points to 2,462.33 on Thursday.
In New York, the Dow Jones industrial average closed up 261.66 points to 12,361.32 Thursday.
The NASDAQ composite index also closed with a slight gain.
However, economic news in the U.S. continued to be grim, with jobless benefit applications up significantly from the previous week.
With files from The Canadian Press
