TORONTO (Reuters) - Canada’s main stock index rose on Thursday, led by energy and financial stocks as oil settled higher after a U.S. crude draw offset disappointment that some major producers did not restrain output.
The index broke a string of three straight lower closes, moving back in sight of a nine-month high reached on Tuesday at 14,172.35. It has rallied more than 22 percent from an almost 3-1/2-year low of 11,531.22 in January.
Oil rose after data showing a weekly drawdown in U.S. crude stockpiles offset a decision by the Organization of the Petroleum Exporting Countries not to set a production ceiling. U.S. crude oil futures CLc1 settled up 16 cents at $49.17 a barrel.
“The summer driving season is starting to get rolling here,” while lower oil production in the U.S. and Canada will also help reduce a supply overhang, said John Kinsey, a portfolio manager at Caldwell Securities.
The energy group rose 1.1 percent, led by a 1.7 percent advance in the shares of Suncor Energy Inc (SU.TO) to C$35.96.
The good energy stocks have the balance sheet and capital expenditure to keep oil production fairly stable and that will help the bank stocks which recently reported extra provisions for their oil and gas loans, Kinsey said.
Shares of Bank of Montreal (BMO.TO) rose 0.4 percent to C$82.66. The bank said it would acquire Greene Holcomb Fisher, a U.S.-based merger and acquisition advisory firm, in a push to strengthen its investment banking business in the United States, particularly in the Midwest.
Canadian Western Bank (CWB.TO) reported a 37 percent slump in second-quarter profit, reflecting a ramp-up in funds set aside to cover loans to oil and gas companies that have turned sour amid a prolonged slump in oil prices.
Still, Canadian Western Bank’s shares rose 0.5 percent to C$25.94. The overall financials group also advanced 0.5 percent.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 73.45 points, or 0.52 percent, at 14,136.99. Nine of the index’s 10 main groups ended higher.
The materials group, which includes precious and base metals miners and fertilizer companies, added 0.6 percent, while spot gold XAU= dipped 0.1 percent.
There are no guarantees a free trade deal between Canada and the European Union will come into force and a lot of hard work still needs to be done, Canadian Trade Minister Chrystia Freeland said.
Reporting by Fergal Smith; Editing by Alistair Bell and James Dalgleish