TORONTO (Reuters) - Toronto’s main stock index turned around late on Friday and eked out a small gain as banks and financial services companies offset oil and gas shares, which fell with oil prices on concern that the global economic recovery is faltering.
The Toronto Stock Exchange’s S&P/TSX composite index ended the session up 11.89 points, or 0.1 percent, at 11,722.07, clawing back from a decline of nearly 1 percent earlier in the day.
Nine of the index’s 10 main groups were higher. The energy sector fell sharply as the price of oil dropped to a six-week low below $74 a barrel.
Suncor Energy was down 0.94 percent at C$32.68, and fellow oil company Canadian Natural Resources fell 0.76 percent to C$33.75.
The index’s materials group, home to golds and fertilizer producer Potash Corp, rose 0.18 percent after recovering from earlier losses.
Takeover target Potash Corp of Saskatchewan remained buoyed by hopes that a sweeter offer will emerge. Potash Corp, up 1.42 percent at C$157.06, is soliciting alternative bidders willing to pay more than the $130 a share offered by BHP Billiton, the world’s largest mining company, in its $39 billion hostile offer.
Stock in five of Canada’s Big Six banks rose, led by National Bank of Canada, up 1.58 percent at C$57.24. Rises were more subdued for other issues, with stock in No. 1 Royal Bank of Canada up 0.04 percent. Toronto Dominion Bank, Bank of Nova Scotia, and Bank of Montreal rose 0.53 percent, 0.49 percent and 0.46 percent respectively.
The Canadian Imperial Bank of Commerce was down 1.03 percent.
The banks start reporting quarterly earnings next week, and Kate Warne, Canadian market strategist at Edward Jones, said they are expected to turn in a good performance.
Canadian consumer prices rose in July as a new sales tax took effect, data on Friday showed, but underlying inflation remained tame, fueling doubts about how fast the Bank of Canada will raise interest rates as the recovery seems to be losing steam.
“We might not see additional rate increases later in the year,” Warne said. “I think that was good news for the financials. That’s why those are up a bit.”
“What we’re seeing today is the concerns that the CPI came in lower than expected, with low inflation and worries about slowing growth that suggest the Bank of Canada may be on hold (on raising rates) longer than people had anticipated.”
Reporting by Pav Jordan; editing by Peter Galloway