The S&P/TSX composite index closed up 84.66 points to 14,637.99 as trading resumed after the Canada Day holiday.
In New York, markets turned lower after a mixed report on the U.S. jobs market. The Dow Jones industrial average ended the day down 27.80 points to 17,730.11, while the Nasdaq fell 3.91 points to 5,009.21 and the S&P 500 declined 0.64 points to 2,076.78.
On the commodity markets, the August crude contract lost three cents to US$56.93 a barrel on Thursday. The price of oil has fallen by nearly half in the last 12 months.
The Canadian dollar fell below the 80-cent US mark for the first time since early June, shedding 0.35 of a U.S. cent to end at 79.71 cents.
The loonie drifted lower in the wake of a Statistics Canada report earlier this week showing the economy contracted for a fourth consecutive month in April.
Roland Chalupka, chief investment officer at Fiduciary Trust Canada, the wealth management arm of Franklin Templeton Investments Corp., downplayed the dollar's fall and said nothing fundamental has changed about the Canadian economy.
"Eighty cents is a psychological marker, just as there are in the markets in general," he said. "We don't see it as any more or any less relevant than 83 cents."
Chalupka said the GDP data showed Canada's economy has shrunk for five out of the last six months as the falling oil price has bitten into the bottom line.
"It looks like the latest oil shock is still working its way through the system," he said.
The shrinking GDP numbers have raised recession fears, and Chalupka said that if the economy continues to soften, it's possible the Bank of Canada could cut its trend-setting interest rate of 0.75 for the second time this year.
Chalupka put the odds of the bank cutting its overnight lending rate by an additional 25 basis points on July 15 at 50/50.
On Thursday morning, Finance Minister Joe Oliver told a crowd of businesspeople that the government's commitment to a balanced budget was not affected by the downturn in GDP.
"Him standing by those projections is a little unusual," Chalupka said. "He hasn't adjusted anything so far, not publicly."
The August gold contract dropped $5.80 to US$1,163.50 an ounce.
American markets will be closed Friday in advance of the July 4th Independence Day holiday on Saturday. Canadian markets will be open.
Also Thursday, the U.S. Labor Department reported the American economy added 223,000 jobs in June, with the unemployment rate falling to a seven-year low of 5.3 per cent.
However, the drop in the unemployment rate was mainly because many of the unemployed had given up searching for jobs, and wage growth stalled in the month.Suggest a correction