Hopes of coordinated stimulus from world governments boosted stocks globally after several sessions of sustained, heavy losses on expectations of a global slowdown that could be prolonged.
US President Donald Trump declared a national emergency to help facilitate increased funding to combat the virus. The Toronto Stock Exchange Composite Index, was up 8% at 13,520.53, recovering some ground after a record decline on Thursday. For the week, the index was on track to fall about 15%, its biggest drop in Refinitiv Eikon data going back to July 1979.
Nine of the TSX's 10 main groups were higher, led by a 10.1% gain for the heavily-weighted financial services sector, while energy was up 5.6%. The price of oil, one of Canada's major exports, had its biggest weekly slide since the 2008 financial crisis despite settling 0.7% higher on Friday, as the coronavirus outbreak threatened demand and crude producers promised more supply.
Despite prospects for stimulus, economists see potential for Canada's economy to slip into recession. "We're penciling in two negative quarters in Q2 and Q3 at this point," said Nathan Janzen, a senior economist at Royal Bank of Canada "Negatives from the virus and the oil price shock are too much to keep growth positive."
Money markets expect the Bank of Canada to ease by an additional 25 basis points at its next scheduled rate announcement on April 15. The Canadian dollar was trading 0.1% higher at 1.3912 to the greenback, or 71.88 US cents, having touched its weakest intraday level since February 2016 at 1.3996.
Canadian government bond yields rose across a steeper yield curve, with the 10-year yield up 16.1 basis points at 0.754%. On Monday, the 10-year yield hit a record low at 0.233%.