Canadian markets up 13 percent as rally continues

March 18th, 2009 - 9:33 am ICT by IANS  

Toronto, March 18 (IANS) Canadian markets continued their rally on the sixth consecutive day Tuesday, with rising oil pricing and financial shares boosting investor confidence.
On the world energy leader Toronto Stock Exchange, the composite index rose 172.89 points to close 8,559.6.

After six positive sessions, the market has regained 13 per cent of its losses. In fact, financial shares have made record gains of over 28 per cent during this period.

On Tuesday, financial shares were again up more than 2.4 percent, with Scotiabank, the nation’s number two bank, closing higher at $31.70 and Bank of Montreal at $33.15.

Energy shares were also up four per cent on steady oil prices after the Organisation of Petroleum Exporting Countries (OPEC) deciding to maintain current production levels last week.

Among major energy gainers, Canadian Natural Resources was up $2.33 to $50.02 and EnCana Corp. up $1.45 to $51.50.

Yet positive news for the world’s ninth largest economy and prime US trade partner this week is that its banks are refusing the government’s money under the $125-billion mortgage purchase plan announced earlier to help the banking sector.

With investors opting to park their money with them after the market collapse, Canadian banks say they are flush with cash, thus not needing government money.

But the bad news is that the US auto giant Chrysler has almost decided to leave Canada after failing to reach a deal with the national auto union on wage cuts.

The number vehicle seller in Canada, Chrysler has two assembly and one spare-part plants where it employs almost 10,000 Canadians. But the troubled auto company, which is already seeking $2.5 billion from the Canadian government, also wants its workers to take wage cuts of more than $20 an hour - from $77 to $57 - to stay afloat.

However, with the Canadian Auto Workers (CAW) union refusing to negotiate wages, Chrysler said Monday it was looking at moving out of Canada if it does make any headway with the workers.

In a statement, the auto company said it is “evaluating alternative solutions in the event these discussions are unsuccessful.” The auto sector is the backbone of the Canadian economy, accounting for about 15 percent of the nation’s GDP.

Canadian plants of three Detroit auto giants account for 20 percent of their overall production, with more than 80 percent of all vehicles manufactured in Canada being shipped to the US market. The Canadian government has already announced a $4-billion bailout for the auto sector.

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