Telecoms shares lift TSX to three-month high
By John Tilak
TORONTO (Reuters) - Canada's main stock index hit its highest level in three months on Tuesday after bullish data signaled rising strength in the global economy and news of Verizon Communications Inc's (VZ.N: Quote) decision not enter the Canadian market drove up telecoms shares.
But gains were tethered by investor fears over greater volatility in the Middle East after some top Republicans said they supported U.S. President Barack Obama's push for limited military action.
After outperforming the S&P 500 .SPX in August for the first time this year, the resource-heavy Toronto market benefited on Tuesday from higher commodity prices, which spurred gains in shares of materials and energy companies.
Telecoms shares surged after Verizon's chief executive said in an interview the U.S. company is not planning to enter the Canadian wireless market.
"It's great for the telcos that they can continue their monopolistic hold on the Canadian consumer, though probably not so good for the consumer," said Diana Avigdor, portfolio manager and head of trading at Barometer Capital Management. "Nothing changes for the telcos."
The country's three biggest wireless companies, which had sold off earlier this year on fears of Verizon's entry, rebounded to have the biggest positive influence on the index.
Telecoms stocks soared 4.4 percent and posted the biggest gain of any major sector by far. Telus Corp (T.TO: Quote) added 6.8 percent to C$34.50, Rogers Communications RCIb.TO jumped 7.2 percent to C$44.59, and BCE Inc (BCE.TO: Quote) rose 3.9 percent to C$44.86.
Figures released for August showed demand picked up in the U.S. manufacturing sector and that domestic demand helped China's services sector grow. Continued...