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Fueled by surging commodity and energy price, the Toronto Stock Exchange (TSX) outperformed U.S. markets during the first quarter of the year.
In the first three months of 2022, the TSX gained 3% to finish trading at 21,890.16, an all-time high. That was better than the performance of the benchmark S&P 500 index in the U.S., which declined 5% in the first quarter, and the technology heavy Nasdaq index, which is down 10% year to date. Stock markets in Europe and Asia also ended Q1 in the red.
The Toronto Stock Exchange has benefitted from oil and natural gas prices that rose to their highest levels since 2014 following Russia’s invasion of Ukraine and record high prices for commodities and metals ranging from wheat to nickel.
Canada is a net exporter of energy, agriculture, and metals, all of which surged in the first quarter after war broke out in Europe. That helped to counter domestic issues at home in the first quarter that included the Omicron variant of Covid-19, and the Bank of Canada raising interest rates to cool off inflation that is running at a 30-year high.
The last time the TSX outperformed the S&P 500 index was in 2016. Historically, the Toronto stock market has lagged the performance of U.S. markets.
Elsewhere around the world, the Hang Seng index in Hong Kong finished trading in the first quarter down 5%, while Germany’s Dax index declined 10% in Q1. The FTSE 100 index in England is flat on the year.