TORONTO (Reuters) - Canada’s main stock index touched an all-time high before notching a record high close on Monday as shares of Tim Hortons Inc shot upward after the coffee chain confirmed it was in merger talks with Burger King.
Tim Hortons and Burger King said late on Sunday the new company would be the world’s third-largest quick service restaurant and would be based in Canada.
Tim Hortons, which soared 19 percent, hit a multiyear high and was the most actively traded stock on the Toronto exchange.
Investors also continued to focus on monetary policy and speculate about the outlook for interest rates, while processing recent comments from the U.S. Federal Reserve and the European Central Bank.
The benchmark TSX is up more than 14 percent this year, making it one of the biggest gainers among its global peers.
Investors are expecting a correction, given the extent of those advances and signs the market could be getting more choppy, said Marcus Xu, president and portfolio manager at M.Y. Capital Management Corp in Vancouver.
“It’s not fundamental, it has nothing to do with data. It’s psychology,” he said. “The second half of the year is going to be volatile.”
Xu is positive about the Canadian financial, energy and technology sectors.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 63.19 points, or 0.41 percent, at 15,598.74 after earlier hitting an all-time intraday high of 15,623.99. Eight of the 10 main sectors on the index were higher.
Financials, the index’s most heavily weighted sector, added 0.3 percent, with Royal Bank of Canada rising 0.2 percent to C$80.98 and Bank of Nova Scotia climbing 0.9 percent to C$74.19.
Shares of energy companies climbed 0.6 percent. Canadian Natural Resources Ltd advanced 0.7 percent to C$46.62, and TransCanada Corp gained 2.6 percent to C$57.45.
In other corporate news, shares of medical marijuana producers Bedrocan Cannabis Corp and OrganiGram Holdings Inc jumped as they began trading on the TSX Venture exchange, with investors expecting fast-growing demand in the fledgling industry.
Tim Hortons was up at C$82.03, helping fuel a 2 percent rise in the consumer discretionary sector.
Editing by James Dalgleish, G Crosse