Manulife deal helps TSX rise, but oil shares drop
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index barely managed to extend its rally to five sessions on Wednesday as energy stocks tumbled in line with a pullback in oil prices, although much of the index outside resources recorded gains.
Manulife Financial Corp led major financial stocks higher after signing an Asian distribution deal, while a range of telecom, consumer, healthcare and industrial names made more modest gains.
But energy stocks, which account for more than 21 percent of the index's weight, failed to get a boost from news that Royal Dutch Shell would buy BG Group for some $70 billion, in part because investors never let go of takeover premiums priced in after the Repsol-Talisman deal, according to one fund manager.
"Canadian energy stock prices are not reflecting reality here, they're reflecting a lot of hope," said Norman Levine, managing director at Portfolio Management Corp.
It didn't help that oil prices dived 6 percent on a mammoth rise in U.S. crude stockpiles and record Saudi production. [O/R]
The energy sector fell 2.3 percent, led by a 2.6 percent decline to C$39.99 for Canadian Natural Resources Ltd. Crescent Point Energy Corp fell 3.6 percent to C$30.19, and Cenovus Energy Inc gave up 2.7 percent to C$21.79.
The Toronto Stock Exchange's S&P/TSX composite index finished up 24.76 points, or 0.16 percent, at 15,213.60, for its fifth straight gain. Eight of the ten main sectors ended higher.
Manulife shares gained 2 percent to C$21.99 after the Canadian insurer signed a deal to pay $1.2 billion to Singapore's DBS Group Holdings for a 15-year partnership to sell products through DBS's Asian branch network. Continued...