TORONTO (Reuters) - Canada’s main stock index gained on Thursday as a 4-percent jump in crude oil prices helped energy stocks, while banks also contributed to a more positive tone.
Oil and gas companies have come under pressure during a sustained fall in the price of crude, a major Canadian export that is at near six-year lows.
Suncor Energy (SU.TO) gained 2.3 percent to C$38.35 and Canadian Natural Resources CNQ.TO rose 3 percent to C$38.81.
“When you’re down over 50 percent maybe enough is enough,” said John Kinsey, portfolio manager at Caldwell Securities. “CNQ and Suncor have shown very good gains from their bottom, the juniors are always a bit slow,” Kinsey said.
While oil rose on Libyan threats to supply and Chinese demand outlook, traders and analysts suspect any rally could be short-lived. [O/R]
“There’s a better tone today,” and oil prices were trying to find a floor, said John Ing, president of Maison Placements Canada. But he warned that overall valuations may be too optimistic, and the index could exhibit some further weakness.
“There still is room on the downside,” Ing said.
Banks were broadly buoyant, with Toronto-Dominion Bank (TD.TO) having the biggest positive influence on the index, up 2.1 percent at C$53.66. Royal Bank of Canada (RY.TO) gained 1.7 percent to C$75.39 and Bank of Nova Scotia (BNS.TO) added 1.8 percent to C$64.60.
“People need income and they want safety too,” Kinsey said, in reference to Canada’s banks. “It’s a good place to put money with all the noise that’s going on in the world.”
He said the banks recently reassured investors about the quality of their oil-related loans, which had caused jitters.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE gained 129.27 points, or 0.86 percent, to end at 15,124.92.
Additional reporting by John Tilak; Editing by Chizu Nomiyama, Bernadette Baum and Bernard Orr