TSX scores a 9-month high, led by energy and financials
By Fergal Smith
TORONTO (Reuters) - Canada's main stock index scored a nine-month high on Wednesday, led by energy and financial stocks as oil rose and investors grew more comfortable with the prospect of an interest rate hike as early as next month by the U.S. Federal Reserve.
The index has rallied 22 percent from an almost 3-1/2-year low in January of 11,531.22, helped by a rebound in commodity prices and stabilization in financial markets.
The market is in the process of getting comfortable with a June rate hike from the Fed, said Paul Gardner, partner & portfolio manager at Avenue Investment Management, who expects financials to benefit the most if the Fed does hike.
Higher oil prices have given financials an additional tailwind because of bank lending to oil companies, Gardner added.
Some of the most influential movers on the index included Royal Bank of Canada (RY.TO: Quote), which rose 0.9 percent to C$79.25 and Canadian Natural Resources Ltd (CNQ.TO: Quote), which advanced 2.1 percent to C$38.91.
The overall financials group rose 0.8 percent, while energy rallied 2.1 percent.
Oil approached $50 a barrel after the U.S. government reported a larger-than-expected drop in crude inventories. U.S. crude CLc1 prices were up 2.2 percent to $49.69 a barrel. [O/R]
Shares of Bank of Montreal (BMO.TO: Quote) rose 1.3 percent to C$84.27. The bank will shed around 4 percent of its 46,000 workforce as part of a drive to cut costs, staff were told in a memo after the lender reported a slightly lower-than-expected quarterly profit and set aside more funds to cover losses on bad loans. Continued...