TSX rises as higher oil prices lift energy

Thu Oct 27, 2016 5:05pm EDT
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index rose on Thursday, led by the energy sector as oil rallied and a slew of oil and gas companies reported quarterly earnings, while financials also gained ground as bond yields rose.

The country's largest oil and gas producer, Suncor Energy Inc (SU.TO: Quote), was the most influential gainer, jumping 5.7 percent to C$41.61 after it reported better-than-expected third-quarter profit.

Cenovus Energy Inc (CVE.TO: Quote) rose 2.8 percent to C$20.72 even as it reported a steeper loss than expected and cut its 2016 exploration and production budget again.

The overall energy group climbed 1.8 percent as oil rose.

U.S. crude oil futures CLc1 settled up 54 cents at $49.72 a barrel as commitments from Gulf OPEC members to cut production assuaged some lingering doubts in the market about cooperation from other producers. [O/R]

Financial sector stocks firmed 0.2 percent, helped by "the yield movement that you are seeing worldwide," said Ian Scott, equity analyst at Manulife Asset Management.

Strong growth data out of Britain pushed yields on the world's benchmark bonds higher, as expectations eased for a Bank of England interest rate cut.

Higher long-term yields benefit insurance and bank stocks most, although gains for banks have been restrained by regulatory uncertainty, including proposed sharing of mortgage risk, Scott added.   Continued...

A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014. REUTERS/Mark Blinch