TORONTO (Reuters) - Canada’s benchmark stock index rose on Monday as energy stocks climbed after investors gauged the recent selloff had gone too far, while shares of Home Capital Group Inc (HCG.TO) recovered from a nearly 14-year low to end 16.8 percent higher.
It was the second straight session of gains for the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE after it had posted on Thursday its lowest close in six weeks. The energy group, which had slumped last week to its lowest since September, rose 1.6 percent.
“Investors think at this point maybe the market is oversold,” said Brian Pow, vice president, research and equity analyst at Acumen Capital Partners.
U.S. crude oil futures CLc1 extended their recovery from a five-month low last week, settling up 21 cents at $46.43 a barrel after Saudi Arabia’s oil minister said that he expected major oil producers to consider extending their deal to cut supply possibly into next year.
Suncor plans to submit an application to regulators for a new thermal oil sands project later this year, which could eventually produce up 160,000 barrels per day.
Home Capital Group Inc (HCG.TO) suspended its dividend, tapped its credit line and added new directors, the latest attempts from Canada’s biggest non-bank lender to restore investor confidence and stem the flow of customer withdrawals.
Its shares tumbled to its lowest since 2003 in early trade before recovering to end up 16.8 percent at C$6.83.
The TSX closed up 70.04 points, or 0.45 percent, at 15,652.08. Eight of the index’s 10 main groups ended higher.
Recent weakening of the Canadian dollar CAD= improves the profitability of those companies on the index that are exporters, Pow said.
The loonie touched a 14-month low on Friday at C$1.3793, or 72.50 U.S. cents.
Institutional Shareholder Services urged PrivateBancorp PVTB.O stockholders to reject Canadian Imperial Bank of Commerce’s (CM.TO) latest takeover offer, citing possible Canadian housing market contagion that could undermine the $4.9 billion cash-and-stock bid.
CIBC’s shares edged up 0.3 percent to C$108.95, while the overall financials group gained 0.2 percent.
The materials group, which includes precious and base metals miners and fertilizer companies, added 0.3 percent even as copper slid to a four-month low after data showed a sharp drop in imports into China.
Additional reporting by Solarina Ho; Editing by Meredith Mazzilli and Lisa Shumaker