August 14, 2012 / 12:37 PM / in 5 years

TSX ticks higher as U.S. retail sales jump

A sign shows TSX information in Toronto September 15, 2008.Mark Blinch (CANADA)

TORONTO (Reuters) - Canada's benchmark stock index edged higher on Tuesday, helped by financial and energy stocks as a rise in U.S. retail sales was seen as possibly heralding broader growth in Canada's largest trading partner.

The rise kept the index near the top of the11,300-11,900 point range it has been trading in for several months, but fund managers were divided on whether the index could break through in August, a typically slower trading month.

"It's difficult to see the TSX go above 12,000 in the next several weeks, given the levels of uncertainty that are there," said Peter Chandler, a senior partner at Canaccord Wealth Management in Waterloo, Ontario.

He pointed to unresolved issues in the euro zone, lack of clarity on a Chinese economic slowdown and the upcoming U.S. presidential election as reasons for Canadian caution.

Conversely, portfolio manager Barry Schwartz from Baskin Financial Services said miners and oil and gas companies could bounce higher to add to recent stocks gains in a string of sectors including telecoms, utilities and consumer staples.

"We're just waiting for the commodity complex to join the party, and if it does you could easily see a 300-500 point move on the TSX in a very rapid period of time," he said.

The U.S. data bolstered the view that a slowdown in economic growth during the second quarter will prove temporary in the United States, which is by far Canada's biggest trading partner.

U.S. retail sales rose for first time in four months in July and were well above analysts' expectations.

"It's very positive. It puts the nail in the coffin of those who were worried about a recession," Schwartz said.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE unofficially closed up 15.28 points, or 0.13 percent, at 11,853.61. It has ended above 11,900 only once since early May.

Six of the index's 10 main sectors pushed higher. Aa 2.1 percent rise in Royal Bank of Canada (RY.TO) to C$51.98 helped financials provide the biggest boost of any sector.

Energy stocks also rose, led by a 1.7 percent jump in Canadian Natural Resources Inc (CNQ.TO) to C$30.66.

But heavyweight mining companies muted the gains, with First Quantum Minerals Ltd (FM.TO) falling 5.1 percent to C$19.03 and Teck Resources Ltd TCKb.TO down 3.3 percent to $28.62.

Gold lost allure as the U.S. retail data pushed investors to scale back bets that the Federal Reserve would move to stimulate the economy.

Research In Motion RIM.TO also weighed heavily, down 6.7 percent at C$7.48, after smartphone market data released by Gartner showed the BlackBerry maker's competitive position had eroded further.

Reporting by Alastair Sharp; Editing by Leslie Adler

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