3 Min Read
TORONTO (Reuters) - Canada's benchmark stock index rose on Wednesday, led by energy stocks as crude oil prices rallied and as financial stocks gained after the Bank of Canada chose to hold interest rates steady.
The energy group climbed 1.3 percent while the financials gained 0.6 percent and industrials rose 0.9 percent.
Valeant Pharmaceuticals International Inc (VRX.TO) shares rose 4.5 percent to C$88.80 after the embattled drugmaker said it had granted activist investor Bill Ackman's Pershing Square a board seat.
That move was one of the most influential for the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE, which has gained in nine of the last 10 trading session and is just off its highest level in three months.
The index ended up 81.85 points, or 0.61 percent, at 13,392.90. Nine of its 10 main sectors ended higher, with consumer staples lagging as grocery chain Loblaw Cos Ltd (L.TO) fell 1.5 percent to C$70.82 and dairy producer Saputo Inc (SAP.TO) slipped 1.2 percent to C$39.71.
While the Bank of Canada refrained from action that could have eroded the Canadian dollar's recent sharp gains, investors said exporters and others that benefit from a weak currency would likely continue to be attractive.
"With a weak loonie strategy going forward, definitely there are certain sectors of the Canadian economy that are going to be benefiting," said Youssef Zohny, portfolio manager at StennerZohny Investment Partners+ of Richardson GMP Ltd.
"Some of them are resource-related, some of them are in manufacturing, and some of them are industrial," he said.
Bank of Nova Scotia (BNS.TO), Royal Bank of Canada (RY.TO) and Toronto-Dominion Bank (TD.TO) were among the biggest gainers on the day, as was Canadian Natural Resources (CNQ.TO), which jumped 3.9 percent to C$34.86.
Oil prices rose as much as 5 percent, with U.S. crude hitting three-month highs after a big gasoline inventory drawdown amid improving demand that overshadowed growing record high crude stockpiles.
The Canadian index has rebounded sharply since hitting an almost 3-1/2 year low in January, helped by a recovery in oil, but Zohny warned it may struggle to push on from here given energy companies have jumped and banks are richly valued.
"It wouldn't surprise us to see the Canadian market cool down in the coming months," he said.
Additional reporting by Matt Scuffham, editing by G Crosse and Nick Zieminski