TORONTO (Reuters) - Canada’s main stock index hit its highest level in nearly 18 months on Monday, led by a jump in Research In Motion Ltd RIM.TO shares following a report that it could license its software.
Canadian stocks also benefited from news on Friday that U.S. House Republican leaders said they would seek to pass a three-month extension of federal borrowing authority in the coming days to buy time for the Democrat-controlled Senate to pass a plan to shrink budget deficits.
RIM shares rose 10.8 percent to C$17.41 after its chief executive told a German newspaper the company will explore strategic alliances with other technology companies once it has launched its new BlackBerry 10 models. RIM shares earlier jumped nearly 18 percent to touch their highest level since early December 2011.
The BlackBerry maker is inching closer to the much-anticipated launch of its BB10 product lineup, which the company hopes will revive its fortunes. The stock has roughly tripled since hitting a low of C$6.10 in September.
“There’s a lot riding on Research in Motion. It is really up to RIM to show investors what it has, that it can come back as a viable competitor to Samsung and Apple devices,” said Serge Pepin, vice president of investment strategy at BMO Asset Management Canada.
“There are definitely a lot of expectations. RIM cannot miss anything at this point,” he added.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 68.56 points, or 0.54 percent at 12,794.25, after touching 12,798.92, its highest since Aug 4, 2011.
Optimism about an eventual solution in Washington to the budget impasse added to the broad sentiment.
“In the fullness of time, most people believe that this is going to get resolved one way or the other,” said Rick Hutcheon, president and chief operating officer at RKH Investments. “The only real issue is how much angst do we have to get through along the way. But it will get fixed.”
Pepin of BMO said an increase in the spread between the 50- and 200-day moving averages is “a bullish indicator that this rally should continue, notwithstanding a bump or two as we get closer to the real debt ceiling debate.”
All 10 main sectors on the index traded higher.
The financial sector rose 0.67 percent and played the biggest role of any sector in leading the market higher.
The information technology sector was up 1.94 percent, boosted by RIM’s surge.
In other company news, Rona Inc RON.TO named a new executive chairman and reshuffled its board of directors on Monday, after reaching an agreement with its largest shareholders, who have been calling for changes. Shares of the Canadian hardware retailer and distributor climbed 3.1 percent to C$11.86.
Additional reporting by Solarina Ho, Euan Rocha; Editing by Chizu Nomiyama and Leslie Adler