TSX rises to one-year high, helped by U.S. jobs data
By Fergal Smith
TORONTO (Reuters) - Canada's main stock index rose to a one-year high on Friday, led by financial and energy stocks after strong U.S. jobs data raised expectations for the growth outlook and for higher U.S. interest rates.
The index has rallied nearly 27 percent since plunging to a three-year low in January. It rose 0.5 percent this week.
"We saw some rotation out of the gold complex that is going directly back into the energy complex and some money that was also still looking for yield is staying within the financials," said Sid Mokhtari, director, institutional equity research, CIBC World Markets.
Data showed that U.S. employment growth increased more than expected in July and wages picked up, which bolstered expectations of an acceleration in economic growth in Canada's largest trading partner and raised the probability of a Federal Reserve interest rate hike this year.
Reduced fear, since the most recent Fed announcement, that U.S. rates will turn negative has been supportive of financial stocks and the overall market, Mokhtari said.
The heavily weighed financials group rose 1.1 percent, including a 1.4 percent gain for Toronto-Dominion Bank (TD.TO: Quote) to C$56.88.
Energy stocks advanced 1.4 percent as losses for oil were pared. U.S. crude oil futures CLc1 settled 13 cents lower at $41.80 a barrel after a near 6 percent rally over the previous two sessions.
Industrials advanced 1.4 percent, led by gains for railroad stocks and for Magna International Inc (MG.TO: Quote). Shares of the car parts maker jumped 5.4 percent to C$52.57 after its profit topped expectations and it raised its earnings forecast. Continued...