TORONTO (Reuters) - Canada’s main stock index closed higher on Monday for a fifth straight session, as shares of Maple Leaf Foods Inc (MFI.TO) jumped after the company said it may sell its bakery business and as banking and gold mining stocks climbed.
The gains extended a two-year peak for the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE that was hit last week on signs of Chinese economic growth and after the U.S. government reopened following a partial shutdown.
“Growth in China will help,” said Douglas Davis, chief executive at investment manager Davis-Rea. “It seems to be picking up.”
The index closed up 50.44 points, or 0.38 percent, at 13,186.53.
Investors have been particularly buoyed by expectations that the U.S. Federal Reserve will have to maintain its accommodative monetary stimulus for longer due to the damage to the economy caused by the government shutdown.
“As long as tapering is avoided the outlook for Canada stays quite good,” Davis said. “But as soon as tapering happens we will probably get kicked a little bit.”
The gold-mining sector has struggled recently - both Goldcorp and Barrick are down more than 25 percent this year - leading to underperformance for the TSX versus U.S. and other indexes.
“Canada has been a big laggard over the last year,” said Gavin Graham, chief strategy officer at Integris Pension Management Corp. “Some indications that the gold stocks will claw back some of their underperformance will help.”
The price of gold was flat after gaining 4 percent last week. <GOL/>
The other three biggest contributors to the index’s gains were Canadian Imperial Bank of Commerce (CM.TO), up 1.6 percent to C$85.35; Royal Bank of Canada, up 0.5 percent to C$69.90; and Bank of Nova Scotia, up 0.7 percent to C$62.00.
RBC, the country’s biggest lender, said it plans to buy back as much as 2.1 percent of its stock.
Maple Leaf Foods jumped to C$14.63 as it looks to sell its controlling stake in Canada Bread Co CBY.TO to focus on its meat business.
Shares of CGI Group fell 2.7 percent to C$36.09. The company provided the technology behind the Obama administration’s health insurance website, which has been beset with glitches.
Editing by Leslie Adler