April 30, 2013 / 12:42 PM / 5 years ago

Suncor buoys TSX as index turns positive on year

TORONTO (Reuters) - Canada’s main stock index recorded its second-biggest percentage jump of the year so far on Tuesday, boosted by gains in almost all main sectors and in Suncor Energy Inc (SU.TO) shares after a strong earnings showing.

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch

The climb helped the index, which has advanced in eight of the last nine sessions, recover from a massive commodities-led selloff earlier this month and turn positive on the year.

An 18 percent jump in CGI Group Inc (GIBa.TO) after the information technology services company reported strong fiscal second-quarter results further lifted sentiment.

Investors also closely eyed potential actions by central banks as weak European economic data heightened expectations of an interest rate cut by the European Central Bank. U.S. Federal Reserve members gathered for a two-day meeting at which they are expected to agree to sustain the bond-buying program.

Despite the recent gains, the Toronto market is flat this year so far, compared with a nearly 12 percent rise in the benchmark S&P 500 index .SPX.

“The TSX is in a good position to narrow the performance gap,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

“We’ve been lagging this whole bull run,” he added. “You just have to wonder if investors have been too downbeat on Canada’s prospects over the past few months.”

Canada’s economy delivered a welcome surprise in February, growing faster than expected and prompting economists to upgrade their forecasts for the first quarter, although none expect the central bank to raise interest rates any time soon.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 143.83 points, or 1.17 percent, at 12,456.50.

Nine of the 10 main sectors of the index were higher.

Suncor rose 6 percent as Canada’s largest energy company increased its dividend 54 percent, said it would buy back C$2 billion ($1.97 billion) of its own shares and reported first-quarter earnings that surpassed expectations. Suncor had the biggest positive influence on the index.

“It’s a pleasant surprise,” Irwin Michael, portfolio manager at ABC Funds, said of Suncor’s results.

“You need more of the big companies doing a little better than expected,” he added. “We expect to see more dividend increases and better earnings as well.”

Suncor’s gains offset declines in other major oil and gas producers, which fell with oil prices. <O/R>

The index’s materials sector, which includes mining stocks, rose 1.4 percent. In the group, miner Goldcorp Inc (G.TO) advanced 2.2 percent to C$29.82.

Financials, the index’s most heavily weighted sector, added 0.9 percent.

($1=$1.01 Canadian)

Editing by Bob Burgdorfer

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