Toronto, US stock markets continue to recover from big declines, loonie rises

North American stock markets seesawed once again on Wednesday as investors couldn’t decide whether to be encouraged by China’s recent move to stimulate its economy or anxious that Beijing thinks it needs stimulus in the first place.

Major markets in Europe were up sharply and U.S. stock market futures indicated the positive momentum would continue when trading begins today in New York and Toronto.

The Dow Jones average of 30 stocks was up by 256 points or 1.6 per cent at 15,923.13 – although it had been above 16,000 earlier.

Markets have been zigzagging for weeks on deepening unease over the ramifications of slowing growth in China, the world’s second-largest economy and the driver of much of the global growth of the past decade.

The broader S&P 500 index’s gain also diminished to 31 points at 1,898.67, while the Nasdaq index was up 2.2 per cent or 88.76 points at just under 4,105, also below an earlier high.

Canada’s largest stock market is having another unsettled day following continued volatility in China.

The two main Chinese indices surged 5.3 per cent and 5.9 per cent on Thursday, snapping a five-day losing streak that had wiped around 20 per cent in market value and sent tremors around global financial markets. The Nadsaq was up 84.90 points or 1.81 per cent, to 4,782.44.

The Shanghai Composite Index may extend its slump by another 13 per cent should it hold below a closing level of 3,200, said Tom DeMark, the founder of DeMark Analytics who predicted this month’s selloff in Chinese equities.

Given that China’s demand for oil, gas, metals and minerals has been a source of strength for Canada’s exporters, there has been a ripple effect on commodity prices including oil – which recently hit multi-year lows below US$39 a barrel.

“The bounce in Wall Street and stabilization in Asia are causing the market to rally back”, said Clairinvest fund manager Ion-Marc Valahu.

Data scheduled for Wednesday includes durable goods orders at 8:30 a.m. ET (1230 GMT), expected to have increased 0.4 per cent in July, down from June’s 0.9 per cent rise. The October contract for WTI crude closed down $2.21 at US$38.24 a barrel. Hong Kong’s Hang Seng index rose or 0.7 per cent, while Sydney’s S&P ASX 200 gained 2.7 per cent and Seoul’s Kospi index and Singapore’s Straits Times index also rose.

EUROPEAN MARKETS: European markets ended in the red after posting gains on Tuesday following losses on Monday.