CANADA STOCKS-TSX up with banks, energy stocks as yields, oil prices rise

(Adds portfolio manager comment, updates prices to close)

* TSX ends up 74.36 points, or 0.49 percent, at 15,355.58

* Eight of TSX’s 10 main sector groups move higher

By Alastair Sharp

TORONTO, June 28 (Reuters) – Canada’s benchmark stock index
gained on Wednesday, boosted by strong moves higher for the
country’s biggest banks as bond yields jumped with a more
hawkish tone from the Bank of Canada.

Energy stocks pushed higher, helped by rising oil prices,
while grocery operator Empire Co Ltd added to the
overall gains, jumping 10 percent to C$21.00 a share. The parent
of the Sobeys grocery chain, which is in the midst of a
turnaround effort, posted adjusted earnings that beat
expectations and increased its dividend payout.

The Toronto Stock Exchange’s S&P/TSX composite index
ended up 74.36 points, or 0.49 percent, at 15,355.58.

“We’re starting to see a little bit of support” for the TSX
after having underperformed U.S. indices so far this year, said
Stan Wong, a portfolio manager at Scotia Wealth Management. “We
could be seeing a bit of a catch up in the back half of the
year” helped by energy and financial stocks as oil prices pick
up and investors position for higher interest rates.

The most influential movers on the day were the big
financial stocks, which rose as investors increased their bets
that the country’s central bank may hike interest rates as soon
as next month.

Royal Bank of Canada gained 1 percent at C$95.06 and
Bank of Montreal rose 1.4 percent to C$95.58. The
financials group, which accounts for over a third of the index’s
weight, gained 0.9 percent overall.

Interest rate cuts in 2015 have done their job and the Bank
of Canada needs to consider its options as excess capacity is
used up, Bank of Canada Governor Stephen Poloz said in a CNBC
interview from Europe.

On the other side of the ledger, Gildan Activewear
shares fell 3.4 percent to C$40.01 after one of its directors
resigned to take up the chief operating officer role at Under
Armour, and as CIBC downgraded the stock to “neutral” from
“outperform.”

Eldorado Gold Corp lost 5.9 percent to C$3.49 after
revising downward its 2017 outlook for production from its
Kisladag operations in Turkey, while larger gold miners also
fell.

The energy group climbed 0.8 percent, with Canadian Natural
Resources Ltd up 1.8 percent at C$38.26, as oil prices
hit their highest point in a week after a small weekly decrease
in U.S. production.

Eight of the index’s 10 main groups were in positive
territory, with advancers outnumbering decliners by a 2.8-to-1
ratio overall.
(Reporting by Alastair Sharp, editing by G Crosse)


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