July 2, 2014 / 11:36 AM / 5 years ago

TSX at record high for first time since 2008, obstacles loom

TORONTO (Reuters) - Canada’s main stock index hit its highest-ever level on Wednesday as stronger-than-expected U.S. private sector jobs data helped lift banks, oil companies and miners.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

The bump into territory last visited before the financial crisis could yet be threatened by the larger non-farm payrolls data from the U.S. government on Thursday.

The advances have renewed concerns that valuations might be getting stretched.

“The market just doesn’t want to lie down. It is chugging ahead and probably moving into overbought territory,” said David Cockfield, managing director and portfolio manager at Northland Wealth Management.

“There’s a lot of investment money out there,” he added. “The market will continue to drift up until something causes a shock. It’s a bit unnerving that the market hasn’t had a shakeout.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended 63.78 points higher, or up 0.42 percent, at 15,209.79.

It traded as high as 15,223.04 in the session. The all-time high was the first since 2008.

The milestone comes on the heels of the Canadian benchmark index’s gains in 11 of the previous 12 months and an 11.5 percent rise since the start of the year.

“It’s ‘all systems go’ for the TSX. It does seem like everything is falling into place for the global equity markets,” said Elvis Picardo, a strategist at Global Securities in Vancouver.

A report from payrolls processor ADP showed U.S. companies hired more workers in June than they did in any month since November 2012. The data beat market expectations.

Canada is heavily dependant on trade with its southern neighbor, and so signs of recovery in the United States tend to bode well for many of the country’s largest corporates.

Adding to the positive mood, industry data showed that automakers sold a record number of cars and trucks in Canada for the month of June, while domestic manufacturing also picked up pace.

Royal Bank of Canada, the country’s largest lender, had the biggest positive impact on the index, adding almost 1 percent to C$77.01. Overall, financials climbed 0.5 percent.

Insurers Manulife Financial (MFC.TO) and Sun Life Financial (SLF.TO) each gained over 1 percent, to C$21.43 and C$39.71 respectively.

Suncor Energy Inc (SU.TO) gained 0.9 percent to C$45.92 as U.S. data showed domestic crude stocks had fallen more than expected, while Teck Resources jumped 4.3 percent to C$21.43 as copper and some precious metal prices rose.

The industrial group rose 0.5 percent, with Canadian National Railway Co (CNR.TO) added 0.9 percent to C$70.05.

In corporate news, Timmins Gold Corp TMM.TO ended a proxy battle by ceding a board seat to an activist nominee. Its shares slipped more than 5 percent, to C$1.81.

Editing by Meredith Mazzilli and Andrew Hay

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