TSX ends at 18-month high close as financials rise
By Fergal Smith
TORONTO (Reuters) - Canada's benchmark stock index climbed to its highest close in 18 months on Tuesday as Bank of Montreal (BMO.TO: Quote) led financial shares higher on a strong earnings report, adding momentum to a month-long sector rally sparked by higher bond yields.
Bank of Montreal rose 2.8 percent to C$92.06. The country's fourth-largest lender reported quarterly earnings well ahead of market expectations, benefiting from strong performances at its capital markets and U.S. personal and commercial businesses.
"Banks and insurance companies have reported solid numbers and are riding the tailwind of a move higher in yields," said Matt Skipp, president of SW8 Asset Management.
Bond yields have risen since early November, reducing the value of insurance companies' liabilities and increase net interest margins of banks.
The overall financials group gained 0.7 percent, while the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 30.63 points, or 0.2 percent, at 15,125.80, its highest close since June 3, 2015.
The index has rallied 16 percent this year.
"Canada is doing well because of strength in financials, strength in energy, strength in materials and all things cyclical," Skipp said.
Cyclical stocks benefit most from an upturn in economic growth. Investors have been betting that U.S. President-elect Donald Trump will deliver significant economic stimulus. Continued...