TORONTO (Reuters) - Canada’s main stock index halted a three-session skid on Tuesday as a jump in oil prices pushed up energy shares in a market otherwise eyeing an eventual U.S. interest rate hike and concerned about expensive stock prices.
Oil prices rose more than 3 percent as bullish investors ramped up bets for another weekly drop in U.S. stockpiles. [O/R]
“The energy sector is leading the way today, helping keep the TSX positive and outperforming the U.S.,” said Youssef Zohny, portfolio manager at StennerZohny Investment Partners+ of Richardson GMP. “Oil prices have held up well post-OPEC meeting.”
Among the most influential movers on the index were oil companies Suncor Energy Inc (SU.TO), which rose 2.3 percent to C$35.88, and Canadian Natural Resources (CNQ.TO), which gained 1.2 percent to C$37.00. The overall energy group climbed 1.8 percent.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE, ended the day up 74.38 points, or 0.50 percent, at 14,817.71. Six of its 10 main sectors rose.
U.S. crude CLc1 prices were up 3.4 percent at $60.13, while Brent crude LCOc1 added 3.7 percent to $65.[O/R]
“When energy is up in a meaningful way it benefits the sector at the expense of others, and vice versa,” said Shailesh Kshatriya, director of Canadian strategies at Russell Investments. “Overall, we remain cautious on the outlook for Canadian equities as oil seems to be hitting a wall around the $60 mark, despite today’s spike.”
Richardson GMP’s Zohny also said overall index sentiment is cautious, pointing to high share prices and uncertainty as the U.S. Federal Reserve debates when, and how fast, to raise interest rates after keeping them near zero since December 2008.
“We think nonresource areas of the market will be in for some challenges this summer due to high valuations and rate hike anticipation,” Zohny said.
The day’s most influential decliners included the country’s biggest bank by market capitalization, Royal Bank of Canada (RY.TO), which slipped 0.9 percent to C$77.92.
The overall financials group gained 0.6 percent, however, as Toronto-Dominion Bank (TD.TO) added 1.7 percent to C$54.44 and Bank of Nova Scotia rose 1.3 percent to C$66.08.
Major pharmaceutical name Valeant (VRX.TO) gave back 0.8 percent to C$286.35, helping push the healthcare group down 1 percent.
The industrials group slipped 0.4 percent, while the consumer discretionary group retreated 0.8 percent.
Among miners, First Quantum Minerals Ltd (FM.TO), advanced 5.6 percent to C$17.87 after Morgan Stanley upped its recommendation and target price for the miner.
Advancing issues outnumbered declining ones on the TSX by 152 to 92, for a 1.65-to-1 ratio on the upside.
Editing by Peter Galloway