Manulife deal helps TSX rise, but oil shares drop

Wed Apr 8, 2015 4:50pm EDT
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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...

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