TSX rises, led by banks as U.S. earnings season kicks off

Fri Jan 13, 2017 5:17pm EST
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index rose on Friday, as higher bond yields and solid U.S. bank earnings helped boost the index's heavyweight financials sector.

The broad gains - resource stocks, consumer names and industrials also broadly moved higher - capped a tumultuous week dominated by uncertainty about the likely policies of U.S. President-elect Donald Trump.

"When Mr. Trump makes a comment about a specific company, a sector, whatever it may be, he moves markets," said Allan Small, a senior investment advisor at HollisWealth. "We should expect this (volatility) more often heading into 2017."

Executives of big U.S. banks expressed optimism on Friday about the outlook for 2017 in their first public comments about quarterly earnings since the U.S. presidential election in November.

Their strong results at the start of U.S. earnings season and higher bond yields after data showed U.S. retail sales rose solidly in December helped boost Canadian lenders, Small said.

Royal Bank of Canada (RY.TO: Quote) climbed 0.8 percent to C$94.50 and insurer Sun Life Financial Inc (SLF.TO: Quote) rose 2.2 percent to C$52.60, while the overall financials group gained 0.7 percent.

Higher bond yields increase net interest margins of banks and reduce the value of insurance companies' liabilities.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 79.12 points, or 0.51 percent, at 15,497.28.   Continued...

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch