TSX bounces back, but loonie continues decline

TORONTO -- The Toronto stock market is bouncing back, though the Canadian dollar continued to weaken Thursday amid speculation that the Bank of Canada will cut its key interest rate next week.

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At mid-afternoon, the loonie was off 0.05 of a U.S. cent at 69.66 cents U.S., hovering near 13-year lows.

The S&P/TSX composite index was up 93.81 points at 12,264.22 in a small turnaround from heavy losses suffered over the last two weeks, including a 200-point loss on Wednesday.

Energy stocks were a source of strength as the February contract for benchmark crude oil rose 99 cents to US$31.47 a barrel. February natural gas declined 13 cents to US$2.14 per mmBtu and February gold lost $13.70 to US$1,073.40 an ounce, while March copper added two cents to US$1.98 a pound.

New York markets were sharply higher after even larger losses the previous session that drove the S&P 500 index into correction territory, or a drop of 10 per cent or more from its peak.

The rally in New York, also led by energy stocks, had the Dow Jones up 243.98 points at 16,395.39 after it shed more than 360 points Wednesday. The S&P 500 was up 31.39 points at 1,921.67, down 9.8 per cent from its peak, while the Nasdaq was ahead 87.44 points at 4,613.50.

The volatility on markets has been mounting amid worries among traders about the slowdown in China and the knock-on effects on oil and other commodity prices.

In Europe, Germany's DAX dropped 1.7 per cent, while France's CAC 40 slid 1.8 per cent and London's FTSE 100 was 0.7 per cent lower.

In Asia, Japan's benchmark Nikkei 225 plunged 2.7 per cent, South Korea's Kospi was off 0.9 per cent and Hong Kong's Hang Seng lost 0.6 per cent. However, the Shanghai composite, the source of much recent concern, rebounded nearly two per cent.


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