TORONTO (Reuters) - Canadian stocks ended higher on Tuesday on strength in the bigger bank and commodity-linked sectors as better-than-expected U.S. services sector data eased investor worries about slowing global growth.
The pace of growth in the U.S. services sector picked up in May as a gauge of new orders improved, according to an industry report released on Tuesday. The Institute for Supply Management’s services index edged up to 53.7 from 53.5 in April, a touch above economists’ forecasts for it to hold steady.
The data helped calm market jitters after a previous string of weaker North American data, which had battered market confidence amid a deepening euro zone crisis.
The key energy, financial, materials and energy sectors led Toronto’s main stock index higher after skidding 7.4 percent, 6.8 percent and nearly 11 percent, respectively, in May.
“Partly we had some good economic news. The ISM was a bit stronger than expected. We also just became oversold. There’s a point in time when people are willing to come in,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, of the market rally.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended the day up 171.94 points, or 1.5 percent, at 11,507.71. All of its 10 main sectors were higher.
The blue-chip S&P/TSX 60 index added 8.90 points to 654.36.
Despite the rise in Toronto and other equity markets, the euro fell and German bond prices gained on Tuesday as the euro zone’s debt crisis showed signs of escalating after Spain said it was being shut out of credit markets. <MKTS/GLOB>
“Until we get some concrete evidence they’re coming up with a solution, markets will be range bound, and we’re going to have each and every day lots of volatility,” Barry Schwartz, portfolio manager at Baskin Financial Services, said of the broader euro-zone debt crisis.
Elsewhere, TransCanada Corp (TRP.TO), up 0.8 percent at C$42.48, will build a C$4 billion pipeline to serve Royal Dutch Shell Plc’s (RDSa.L) planned liquefied natural gas plant on British Columbia’s northern coast, the company said on Tuesday.
Belden Inc (BDC.N), a manufacturer of cable-TV and networking products, said on Tuesday it will buy Canadian rival Miranda Technologies Inc MT.TO for C$377 million to expand its presence in niche markets. Miranda, the second most heavily traded stock on the TSX, was up 62 percent at C$16.87.
Shares of QLT Inc QLT.TO rose 5.5 percent TO C$8.25 on Tuesday, a day after an activist investor’s slate of nominees for the board of the Canadian eye drug developer prevailed in a shareholder vote, signaling a shakeup at the company.
Editing by Padraic Cassidy