TORONTO (Reuters) - Canada’s main stock index bounced back on Wednesday, with gains for banks and industrial stocks leading the charge and overshadowing losses among energy names, which wilted along with underlying commodity prices.
Air Canada (AC.TO) was a major winner, jumping 8 percent to C$13.59, after it said its pension funding gap had evaporated and more cash could be returned to investors or spent on new planes.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 59.66 points, or 0.40 percent, at 15,110.47.
Shares in banks were broadly higher as quarterly results from several major lenders helped ease concerns about the impact of an oil price slump and sluggish Canadian economy.
“The notion that the banks were going to have huge credit losses because of what’s going on in Alberta is wrong, or certainly at least premature,” said David Baskin, portfolio manager and president of Baskin Financial Services.
Peers such as Toronto-Dominion Bank and Bank of Nova Scotia, who will follow with earnings later this week, also rose.
The index’s energy sector retreated 0.7 percent. It has struggled with a precipitous drop in oil prices, which recently leveled out far below the roughly $100 per barrel price of a year ago.
Joe Tatusko, chief investment officer at financial advisory firm Westport Resources in Connecticut, said he sees a dim future for Canadian oil stocks.
“We just see continued weakness ahead,” he said. “You look out west, you’ve got a high cost of oil production, much less competitive today and that’s not likely to change.”
Crescent Point, Canada’s No. 4 independent oil and gas producer, dropped after it said it would pay C$1.5 billion to buy Legacy Oil + Gas Inc LEG.TO.
After scaling back exposure to Canada’s energy producers last year as oil prices plunged, Tatusko said he needs to see oil at $75 a barrel and natural gas near $4 before coming back in.
Brent LCOc1, the global crude benchmark, lost 2.5 percent to $62.12 on Wednesday. U.S. natural gas futures NGc1 were around $2.80.
Editing by Peter Galloway and Meredith Mazzilli