TORONTO (Reuters) - Canada’s main stock index gained on Wednesday after U.S. economic data and a German political deal to form a coalition government supported sentiment, offsetting a decline in shares of energy producers.
The rise marked a moderate recovery from the previous session, when the Toronto stock market’s benchmark index had its sharpest one-day drop in more than two months.
Global equity markets cheered on Wednesday as German Chancellor Angela Merkel clinched a coalition deal with the Social Democrats about two months after emerging victorious in the country’s general election.
Stock markets also got support from data that showed the number of Americans filing new claims for unemployment benefits fell unexpectedly last week.
Investors appear to be becoming less sensitive to speculation about U.S. Federal Reserve’s monetary policy moves, and are reacting instead to fundamentals, said Marcus Xu, president and portfolio manager at MY Capital Management.
Xu also noted that investors have been pulling out of commodity stocks. “The money has to go somewhere in Canada,” he added. “So investors have been buying traditional sectors like industrials, healthcare and consumer.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 12.29 points, or 0.09 percent, at 13,362.06. It is up about 8 percent this year.
Seven of the 10 main sectors on the index were higher on Wednesday.
Shares of healthcare companies climbed 0.8 percent. In the group, Valeant Pharmaceuticals International VRX.TO was up 0.5 percent at C$114.75.
With the U.S. crude oil price declining, shares of energy companies slipped 0.3 percent. Enbridge Inc (ENB.TO) gave back 2.3 percent to C$43.71 and Suncor Energy Inc (SU.TO) lost 0.1 percent to C$36.55.
In corporate news, coffee and doughnut chain Tim Hortons Inc THI.TO said it is selling about C$450 million ($426.9 million) in senior unsecured 10-year notes as part of a plan to fund a previously announced share buyback. The stock was little changed at C$61.57.
Editing by Peter Galloway