TSX rises to one-week high as banks rally on BMO's earnings

Tue Aug 23, 2016 5:41pm EDT
 
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index edged up to a one-week high on Tuesday as better-than-expected earnings for Bank of Montreal supported bank stocks, offsetting losses for the materials group.

Bank of Montreal (BMO.TO: Quote) rose 2.2 percent to C$86.27. Canada's fourth largest bank reported quarterly results which beat analysts' expectations, benefiting from strength in its commercial banking and capital markets businesses.

BMO's earnings made the market optimistic about the earnings of other banks that are due to report, said Paul Hand, managing director at RBC Capital Markets.

Gains for bank stocks helped drive the financials group 0.8 percent higher, while the energy group firmed 0.1 percent as oil rallied.

U.S. crude oil futures CLc1 settled up 69 cents at $48.10 a barrel after Reuters reported that Iran was sending positive signals that it may support joint OPEC action to prop up the market. [O/R]

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 16.58 points, or 0.11 percent, at 14,764.77. It touched its highest since Aug. 15 at 14,796.56.

If Canada's other major banks can also beat expectations and if oil can remain in the "high ($)40s," then the market can set new highs for the year, Hand said.

"The longer-term trend sure feels like it's up at the moment," he added.   Continued...

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