TORONTO—Canada’s biggest stock market rose while Wall Street hovered around record levels on Nov. 9, as investors warmed to the idea that the victory of U.S. president-elect Donald Trump will be good news to business on both sides of the border.
The optimistic tone helped push the resource-heavy S&P/TSX composite index higher led by a strong rally in the gold, metals, and materials sectors. Investors were anticipating that there will be growing demand for copper if Trump sets off with his large infrastructure building plans.
Energy companies also climbed on the TSX, as investors interpreted the Republican’s policies on oil as ones that were much more friendlier than those of the previous administration.
The bounce in the stock market came as a surprise as most had been expecting a gloom and doom scenario if the brash, billionaire clinched the White House over Democrat candidate Hillary Clinton.
But at the open, the picture that emerged was one of cautious hope on Bay Street and Wall Street.
“This is the best case scenario for how the markets are reacting,” said Kathryn Del Greco, a vice-president and investment adviser at TD Wealth.
“We were certainly expecting—fearing—a significant sell-off in the market as a result of… a new president that is an unproven entity in political life. The market does not like uncertainty.”
Del Greco attributed the positive reaction to Trump’s victory speech, which reassured and calmed markets with its “softer tone.”
Among the biggest losers were forestry and manufacturing companies, including several B.C. lumber producers and Ontario-based auto parts manufacturers, as questions were raised about whether the president-elect will make changes to free-trade agreements.
“It’s uncertain going forward how the market will interpret this president-elect,” she said. “The road map to the future will depend on Trump’s transition team, who he appoints to top cabinet positions, and whether his message is going to be one that focuses on fiscal easing, deregulation, and tax reform. That type of dialogue and platform will be very positive for the marketplace.”
In New York, the Dow Jones industrial average climbed just shy of an all-time closing record. It was in sharp contrast to futures trading, which saw the Dow sink by 750 points at midnight.
Colin Cieszynski, chief market strategist at CMC Markets Canada, said markets showed their resiliency. Most were bracing for drastic fallout post-election similar to that of the Brexit vote, when Britain unexpectedly voted to leave the European Union in June.