TSX rises to 11-month high as mining stocks rally

Thu Jul 21, 2016 4:41pm EDT
 
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index rose to an 11-month high on Thursday as mining stocks rallied and strong earnings reports boosted the shares of Rogers Communications Inc (RCIb.TO: Quote) and Encana Corp (ECA.TO: Quote).

The index has rallied 12 percent year-to-date, outperforming Wall Street and many other major markets.

"Canada is actually in OK economic shape relative to other parts of the world," said Bryden Teich, portfolio manager at Avenue Investment Management, who expects fiscal spending to give the economy an additional boost.

The Liberal government's March budget placed a big bet on stimulus, including a monthly government payment to Canadian families that kicked in on Wednesday.

"Relatively speaking the stock market still offers a place to get a rate of return when there is not much else out there," Teich added.

Yields on bonds in many developed markets are at historic lows after some central banks introduced negative interest rates.

The ECB held rates at record lows and left the door open to more policy stimulus, while spot gold XAU= rebounded from an earlier three-week low and rose more than 1 percent.

The materials group, which includes precious and base metals miners and fertilizer companies, added 2.1 percent. Barrick Gold Corp (ABX.TO: Quote) rose 2.8 percent to C$26.72 and Teck Resources TCKb.TO was up 4.1 percent at C$17.96.   Continued...

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