Bank shares boost TSX ahead of earnings

Tue May 24, 2016 5:23pm EDT
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index closed higher on Tuesday as strength in the financial sector ahead of the bank earnings season helped overcome a slump in shares of gold miners.

The TSX, which also received support from the energy group, hit a seven-month high earlier in the session.

The index pushed above the 14,000 threshold for the first time since October, as trading resumed after the Victoria Day holiday on Monday. It has rebounded 21 percent from its almost 3-1/2-year low of 11,531.22 in January.

Financials rallied as banks were among the biggest gainers on Wall Street on speculation that the U.S. Federal Reserve might hike interest rates in June.

Royal Bank of Canada (RY.TO: Quote) rose 0.9 percent to C$78.52, and Bank of Nova Scotia (BNS.TO: Quote) advanced 1.1 percent to C$63.76, while the overall financials group was up 1.2 percent.

Canada's biggest banks are expected to set aside more funds to cover bad loans to the oil and gas sector when they announce second-quarter results this week.

The energy group climbed 0.6 percent, including a 2.6 percent gain for Suncor Energy Inc (SU.TO: Quote) to C$35.39. U.S. crude CLc1 prices were up 1.5 percent at $48.80 a barrel. Industrials rose 0.3 percent, led by railway stocks, while the consumer staples group was up 1.2 percent.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 33.27 points, or 0.24 percent, at 13,952.85. Nine of the index's 10 main groups were higher.   Continued...

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