Optimism that the Covid-19 pandemic will soon be over is driving up stocks and oil prices, analysts say.
The Toronto Stock Exchange’s benchmark index topped the 20,000-point level for the first time ever this week driven by higher oil prices and more signs that a strong economic rebound from the depths of the coronavirus pandemic is coming.
At 20,000, the TSX has now gained more than 78 per cent from the low of 11,228 it closed at on March 23, 2020.
The rally was broad-based, as financial firms, manufacturers, tech companies and the energy sector were almost uniformly higher.
Barry Schwartz, chief investment officer at Baskin Wealth, says the rally makes sense since the index is home to all sorts of companies with commodities that are very much in demand.
“Lumber, a barrel of oil, copper, gold—anything you can drop onto your foot that would hurt is going up in price,” he said in an interview. “You open up the economy and things get back to normal [so] this is the TSX’s time to outperform.”