TSX posts nearly two-week high on French election relief

Mon Apr 24, 2017 5:16pm EDT
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index rose on Monday to a nearly two-week high, boosted by solid gains for financials as investors cheered French election results that limited the risk of another core member leaving the European Union.

Some of the index's economically-sensitive sectors, such as industrials, consumer discretionary and financials, benefited most as the market's favored candidate won the first round of the French election.

"We are seeing notable outperformance in the financial sector," said Candice Bangsund, vice president, global asset allocation at Fiera Capital Corporation.

"A lot of that is spillover from the rebound in European financial stocks, but also from the backup in interest rates."

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

The financials group gained 1.5 percent, with Royal Bank of Canada (RY.TO: Quote) climbing 1.6 percent to C$96.07 and insurer Manulife Financial Corp (MFC.TO: Quote) up 3.0 percent at C$23.84.

Industrials gained 0.9 percent and consumer discretionary stocks rose 0.7 percent, while the market awaited a U.S. announcement on Wednesday of a tax code overhaul.

"They (the Trump administration) seem to be shifting their focus back to the domestic pro-growth agenda," Bangsund said.   Continued...

A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. Canada's main stock index was little changed on Monday as weakness in financial and energy shares offset gains in the materials sector.   REUTERS/Mark Blinch