3 Min Read
TORONTO (Reuters) - Canada's main stock index rose on Monday to a nearly two-week high, boosted by solid gains for financials as investors cheered French election results that limited the risk of another core member leaving the European Union.
Some of the index's economically-sensitive sectors, such as industrials, consumer discretionary and financials, benefited most as the market's favored candidate won the first round of the French election.
"We are seeing notable outperformance in the financial sector," said Candice Bangsund, vice president, global asset allocation at Fiera Capital Corporation.
"A lot of that is spillover from the rebound in European financial stocks, but also from the backup in interest rates."
Higher bond yields reduce the value of insurance companies' liabilities and increase net interest margins of banks.
Industrials gained 0.9 percent and consumer discretionary stocks rose 0.7 percent, while the market awaited a U.S. announcement on Wednesday of a tax code overhaul.
"They (the Trump administration) seem to be shifting their focus back to the domestic pro-growth agenda," Bangsund said.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 97.98 points, or 0.63 percent, to 15,712.46, its highest close since April 11.
Seven of the index's 10 main groups ended higher.
The materials sector, which includes precious and base metal miners and fertilizer companies, lost 0.8 percent as gold prices retreated.
Goldcorp Inc (G.TO) declined 2.1 percent to C$20.00 and Barrick Gold Corp (ABX.TO) fell 1.0 percent to C$25.71. Barrick is due to report quarterly earnings later on Monday, with Goldcorp set to follow on Wednesday.
Smaller producer Semafo Inc (SMF.TO) slumped 15.7 percent to C$3.32, its lowest in more than a year, after the gold miner reduced its production outlook for 2017.
The energy group was little changed as oil prices fell. U.S. crude oil futures settled 39 cents lower at $49.23 a barrel.
Home Capital Group Inc (HCG.TO) shares fell 9.1 percent to C$17.50 after the country's biggest non-bank lender said founder and former Chief Executive Officer Gerald Soloway would step down from its board, days after regulators accused the company of making "materially misleading statements" to investors.
Precision Drilling Corp (PD.TO) dropped 3.3 percent to C$5.64 after reporting a smaller-than-expected rise in revenue.
Additional reporting by Alastair Sharp; Editing by Lisa Von Ahn and Chris Reese