TSX rises most in seven weeks as oil rallies, investors buy post-Brexit

Wed Jun 29, 2016 4:36pm EDT
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index scored its largest gain in seven weeks on Wednesday as higher oil prices boosted shares of energy companies and investors bought back into banks after the initial shock of Britain's vote to exit the European Union.

The broad gains echoed moves higher in global stocks as investors bet on central banks going easier on monetary policy in coming months.

The prospect of additional stimulus is supportive of commodity prices, a major driver of Canada's resource-linked market.

Investors may also be anticipating better earnings growth, said Kevin Headland, senior investment strategist at Manulife Asset Management.

"We believe that the actual landscape in terms of earnings prospects is better in Canada from a year-over-year perspective as we get further and further away from the bottom of the oil market," Headland added.

U.S. crude oil prices CLc1 settled $2.03 higher at $49.88 a barrel after a larger-than-expected drawdown in U.S. crude inventories [O/R], while the energy group surged nearly 3 percent.

Suncor Energy Inc (SU.TO: Quote) gained 1.9 percent to C$35.59 and Canadian Natural Resources (CNQ.TO: Quote) added 3.6 percent to C$39.67.

Financial stocks rallied 0.9 percent, including gains for some of the country's biggest banks. Royal Bank of Canada (RY.TO: Quote) rose 0.7 percent to C$76.90 and Bank of Nova Scotia (BNS.TO: Quote) advanced 1.2 percent to C$64.51.   Continued...

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