Gold miners, banks push TSX to record close

Fri Jul 25, 2014 5:17pm EDT
 
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index showed no signs of slowing its ascent into uncharted territory on Friday, with gold miners and banks helping it to another record close and a 1.2 percent gain in a week of all-time highs.

With the Toronto Stock Exchange's S&P/TSX composite index still relatively underperforming U.S. indices, investors are confident that economic fundamentals underpin the rally, despite worries of a pullback."In the grand scheme of things I'm fairly comfortable with valuations," said Marcus Xu, a portfolio manager at MY Capital Management Corp in Vancouver.

"The overall theme is that emerging markets seem to be doing OK," Xu said. "On the back of that notion commodities are doing fairly well."

Canada's stock market relies on natural resource names for much of its bulk, and signs of global recovery help those stocks on the expectation that demand will pick up.

Major gold miners were among the biggest positive contributors in the session, with Goldcorp Inc jumping 4.2 percent to C$30.51 and Barrick Gold Corp adding 2.8 percent to C$20.20.

Rick Hutcheon, president at RKH Investments, said that equities are likely to remain more popular than fixed income while interest rates are low and looking to rise, and that energy and financial stocks are well placed to gain from global recovery and higher rates.

"There really aren't a whole lot of choices until the Fed starts to raise rates, which as an aside appears to be still a year-ish away," he said, referring to the U.S. Federal Reserve.

Some of Canada's biggest banks also helped the push on Friday, with Toronto-Dominion Bank up 1.2 percent to C$56.52 and Royal Bank of Canada gaining 0.7 percent to C$79.89.   Continued...

 
A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch