TSX cheers Liberal election win, construction stocks up

Tue Oct 20, 2015 5:00pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Investors in Canadian stocks on Tuesday cheered a resounding Liberal election victory that could loosen government purse strings to kickstart growth, as construction firms and railways rose with heavyweight resource and financial stocks.

The Liberals' strong showing banished worries about a potential minority government. And while the new government plans to run deficits, it has also said it would keep corporate tax rates steady.

"People are breathing a sigh of relief and they are looking for those areas that should show a positive impact from what the Liberals were talking about," said Irwin Michael, portfolio manager at ABC Funds.

During the campaign, Liberal leader Justin Trudeau pledged to run a C$10 billion ($7.7 billion) annual budget deficit for three years to invest in infrastructure and help stimulate Canada's economy.

If the plan works "the industrial space could benefit, the consumer space will continue to benefit in my opinion," said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri.

The industrial group gained 2.6 percent, consumer discretionary names added 1.9 percent, and consumer staples rose 1.1 percent.

Among the stocks to jump were construction companies SNC-Lavalin Group (SNC.TO: Quote), which added 1.4 percent to C$42.95, and Aecon Group Inc (ARE.TO: Quote), which gained 5 percent to C$15.43.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 83.54 points, or 0.61 percent, at 13,841.92.   Continued...

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