Toronto's main stock index jumped more than 1 percent on Wednesday morning as rising commodity prices and healthy U.S. earnings pushed euro zone fears to the background and boosted risk appetite.
Thanks to its heavy weighting in resources, the TSX was outperforming its U.S. counterparts, as it had underperformed in the previous session. .N
Energy shares were up 1.7 percent as oil prices rose more than $2 on the back of data showing U.S. gasoline stocks fell sharply last week.
Economically sensitive financial issues also fared better after earnings beats and strong forecasts from U.S. consumer bellwethers Target Corp (TGT.N: Quote) and Staples Inc (SPLS.O: Quote) shifted the focus away from Europe's debt crisis. .N
Among the top gainers, Suncor Energy (SU.TO: Quote) rose 1.5 percent to C$32.36, Canadian Natural Resources (CNQ.TO: Quote) climbed 1.4 percent to C$36.47 and Bank of Nova Scotia (BNS.TO: Quote) added 1.3 percent to C$54.12.
"It's a big day for oil ... also people are starting to feel a little bit of optimism about the Canadian banks. Mostly because they're not the European banks," said David Baskin, portfolio manager and president of Baskin Financial Services, noting quarterly bank earnings start next week.
While Baskin doesn't expect the banks to beat analyst expectations, he noted their balance sheets and dividends are strong.
At 10:34 a.m. (1434 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 161.63 points, or 1.29 percent, at 12,692.34. All of the 10 main groups were higher, including materials, home to miners, as copper prices rose and gold neared $1,800 an ounce.
Goldcorp Inc (G.TO: Quote) gained 1.8 percent to C$50.61, while First Quantum Minerals (FM.TO: Quote) jumped 3.1 percent to C$23.76.
"Earnings of companies have been much better than the macro economic outlook and had we been in a position with a stable macro economic outlook, the markets would be much higher ... stocks are cheap," Baskin said.
"Just as yesterday all the stars were misaligned, today they're aligned ... up, down, up, down, enough to make you seasick."