TSX firms as oil rallies; index hits nearly seven-month high

Tue May 17, 2016 5:52pm EDT
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock touched a nearly seven-month high on Tuesday as higher commodity prices supported energy and mining stocks, but some gains for the index were pared as financial and consumer stocks fell.

The energy group rallied nearly 1 percent, although some companies are facing renewed disruption to operations from a massive wildfire around Alberta's Fort McMurray oil sands hub.

"The general balance in the oil market ... is healthier for these companies than the negative impact of what's happening in Fort McMurray," said Diana Avigdor, head of trading at Barometer Capital Management.

Oil prices rose for a second straight day, with U.S. futures CLc1 hitting seven-month highs above $48 a barrel, on expectations of a drawdown in U.S. crude stockpiles and a new wildfire threat on Canadian oil supplies.

"We keep expanding our energy exposure," said Avigdor, who added that U.S. investors have been active buying energy stocks and that strengthening in the Canadian dollar has added to the attractiveness of the sector for those investors.

Canadian Natural Resources (CNQ.TO: Quote) added 1.5 percent to C$38.30 and pipeline operator Enbridge Inc (ENB.TO: Quote) rose 1.21 percent to C$52.77.

Suncor Energy Inc (SU.TO: Quote) advanced 0.4 percent to C$35.12 after saying it had started a staged shutdown of its base plant in the region.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 23.61 points, or 0.17 percent, at 13,917.10. Just three of the index's 10 main groups ended higher.   Continued...

A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014.  REUTERS/Mark Blinch