TORONTO (Reuters) - Canada’s main stock index closed higher on Tuesday, led by a rise in gold shares, after Federal Reserve Chairman Ben Bernanke’s comments defending the U.S. central bank’s stimulus boosted the appeal of the bullion as an inflation hedge, driving up gold prices.
Bernanke strongly defended the central bank’s bond-buying stimulus in testimony before Congress, saying its benefits clearly exceed possible costs.
Shares of Bank of Montreal (BMO.TO), Canada’s fourth-largest bank, rose about 1.3 percent after the company reported a core profit that topped expectations on the back of higher markets-related revenue.
“The fundamentals are lining up reasonably well for the TSX,” said Julie Brough, vice president at Morgan Meighen & Associates.
She said the Canadian market is likely to climb further by the end of the year, helped by a pickup in the economy and signs of strength in corporate earnings.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 9.57 points, or 0.08 percent, at 12,660.44. However, six of the 10 main sectors on the index were in the red.
The gains were kept in check by weakness in energy shares, which tracked lower oil prices. <O/R>
The materials sector, which includes mining stocks, added 0.9 percent. Gold prices rose 1.3 percent, making their biggest one-day gain in three months. <GOL/>
Financials, the index’s weightiest sector, were up 0.2 percent, with BMO’s gains partially offset by a 0.5 percent decline in Royal Bank of Canada (RY.TO), which fell to C$63.25.
BMO, which reported results for its fiscal first quarter ended January 31, also raised its quarterly dividend, citing its strong business performance and solid capital position.
“It’s a good sign for the rest of the banks,” said Rick Hutcheon, president and chief operating officer at RKH Investments.
RBC, National Bank of Canada (NA.TO), Toronto-Dominion Bank (TD.TO), and Canadian Imperial Bank of Commerce (CM.TO) will report quarterly results on Thursday, followed by Bank of Nova Scotia (BNS.TO) next week.
The uncertainty over the outcome of the Italian election was a drag on oil prices, which fell to a one-month low.
Energy shares fell 0.6 percent. Suncor Energy Inc (SU.TO), Canada’s largest energy company, slipped 1.4 percent to C$30.92.
Additional reporting by Cameron French; editing by Jeffrey Hodgson and Leslie Adler