TORONTO (Reuters) - Canada’s main stock index finished near 10-1/2-month highs on Friday, with financial stocks and Research in Motion Ltd RIM.TO shares leading the market higher.
A combination of recent positive Chinese and North American economic data, decent earnings results, acquisition deals, low volatility and muted volumes have all contributed to positive investor sentiment, analysts said.
“The market’s been grinding higher. All in all, the big sector weights are generally positive,” said Paul Hand, managing director at RBC Capital Markets, referring to the influential financial, material and energy sectors, which were up 0.59 percent, 0.08 percent, and 0.45 percent respectively. Combined, they make up roughly 75 percent of the market.
“The market’s getting increasingly immune to the bad news. The boy who cried wolf — by the 48th time, you sort of start to ignore it,” he added.
Overnight news that China’s economy grew at a slightly faster-than-expected rate in the fourth quarter helped boost materials and energy shares. The report was the latest indication that China, a major resource consumer, is recovering from a slowdown.
“The Chinese number yesterday was the key driving force, I think ... obviously people are a bit more optimistic on the resource side. That certainly helps, especially with things like copper,” said Sal Masionis, stockbroker at Brant Securities.
Oil firm Canadian Natural Resources Ltd (CNQ.TO) closed 2.11 percent higher to C$29.95, while Bank of Nova Scotia (BNS.TO) finished up 0.77, at C$57.86. Royal Bank of Canada (RY.TO) added 0.49 percent to C$61.74 to round off the top three most influential stocks.
The technology group gained 2.23 percent, bolstered by RIM stock which rose 7.02 percent to C$15.71. Jefferies & Co analyst Peter Misek lifted his stock rating on RIM to “buy” from “hold”, adding to optimism about the make-or-break launch on January 30 of a line of smartphones powered by the company’s new BlackBerry 10 software.
“It’s a very, very tricky situation ... There’s an awful lot of rumors going out about it, but I think it’s going to be a very, very tough uphill battle (for RIM),” Masionis said.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE climbed 50.96 points, or 0.40 percent, to 12,725.69. Friday’s intraday high of 12,751.16 was its strongest performance since February 29, 2012. The index has climbed about 1 percent this week.
It has only retreated three sessions since the start of the year and has added about 2.35 percent during that period.
Nine of the index’s main sectors were higher, with consumer staples the lone decliner, retreating 1.2 percent.
Consumer staple Shoppers Drug Mart Corp SC.TO was the biggest drag on the index, slumping 5.19 percent to C$41.83 following news that Canadian provinces have agreed to new price caps on six generic drugs in what could be the start of a coordinated effort to clamp down on costs.
Editing by Peter Galloway and Andrew Hay