The S&P/TSX composite index more than reversed Tuesday's triple-digit slide and surged 157.83 points to 14,548.26.
A sharp rise in oil prices helped nudge the Canadian dollar up 0.16 of a cent to 87.8 cents US.
U.S. indexes were also positive in the wake of election results that saw the Republicans retain control of the House of Representatives and gain a majority in the Senate.
The Dow Jones industrials climbed 100.69 points to 17,484.53 and the S&P 500 index added 11.47 points to 2,023.57, while the Nasdaq declined 2.92 points to 4,620.52.
Oil prices jumped $1.49 to US$78.68 a barrel a day after crude in New York tumbled to a three-year low in response to plans by Saudi Arabia to cut oil prices to its U.S. customers.
Saudi Arabia made the cut in order to compete with a surge in oil production in the United States.
"In their minds, they think why should they cut back production and let the U.S. continue full steam ahead?" said Allan Small, senior adviser at HollisWealth.
"So the Saudis are saying (they) can work with a lower price per barrel, and they don't think that others can, and they're hoping they can price some people out of the market. Their costs are a lot lower."
Crude prices got extra support after the Energy Information Administration reported U.S. crude supplies rose by a smaller than expected 500,000 barrels last week, far less than the 1.2-million-barrel rise that had been forecast.
Prices had jumped almost $2 earlier in the session amid unconfirmed rumours of a pipeline explosion in Saudi Arabia.
The price move by Saudi Arabia on Tuesday sparked a sell-off of TSX energy stocks, with the sector dropping more than four per cent. It made good on that loss Wednesday, however, the component had already taken a beating in the October market sell-off and is still down 10 per cent over the past month.
The consumer discretionary sector was ahead 2.2 per cent as auto parts maker Magna International Inc. (TSX:MG) said Wednesday that its third-quarter profit grew to US$470 million or $2.19 a share. That was up from $319 million or $1.39 per diluted share a year ago. Sales increased to $8.82 billion, up from $8.34 billion a year ago. Magna shares gained $6.37 or 5.75 per cent to $116.97.
The base metals sector turned positive, up 0.1 per cent even as the December copper contract shed one cent to US$3.01 a pound.
The U.S. dollar strengthened following the election results and the currency weighed on other commodities priced in U.S. dollars, particularly gold, as the December contract in New York fell $22 to US$1,145.70 an ounce. The gold sector was down 4.25 per cent with Barrick Gold (TSX:ABX) down 56 cents or 4.3 per cent to $12.50.
Elsewhere on the corporate front, pipeline company TransCanada (TSX:TRP) gained three per cent to $56.86 on hopes that a Republican win might mean approval for its Keystone XL pipeline in the U.S.
And shares in coffee and doughnut chain Tim Hortons Inc. (TSX:THI) were ahead 55 cents to C$92.39 as the company earned $98.1 million or 74 cents per share in its latest quarter, down from $113.9 million or 75 cents per share a year ago. Total revenue amounted to $909.2 million, up from $825.4 million. The company is in the midst of being taken over by American fast food giant Burger King.