TORONTO (Reuters) - Canada’s benchmark stock index gained on Wednesday, boosted by strong moves higher for the country’s biggest banks as bond yields jumped with a more hawkish tone from the Bank of Canada.
Energy stocks pushed higher, helped by rising oil prices, while grocery operator Empire Co Ltd (EMPa.TO) added to the overall gains, jumping 10 percent to C$21.00 a share. The parent of the Sobeys grocery chain, which is in the midst of a turnaround effort, posted adjusted earnings that beat expectations and increased its dividend payout.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 74.36 points, or 0.49 percent, at 15,355.58.
“We’re starting to see a little bit of support” for the TSX after having underperformed U.S. indices so far this year, said Stan Wong, a portfolio manager at Scotia Wealth Management. “We could be seeing a bit of a catch up in the back half of the year” helped by energy and financial stocks as oil prices pick up and investors position for higher interest rates.
The most influential movers on the day were the big financial stocks, which rose as investors increased their bets that the country’s central bank may hike interest rates as soon as next month.
Royal Bank of Canada RY.TO gained 1 percent at C$95.06 and Bank of Montreal (BMO.TO) rose 1.4 percent to C$95.58. The financials group, which accounts for over a third of the index’s weight, gained 0.9 percent overall.
Interest rate cuts in 2015 have done their job and the Bank of Canada needs to consider its options as excess capacity is used up, Bank of Canada Governor Stephen Poloz said in a CNBC interview from Europe.
On the other side of the ledger, Gildan Activewear (GIL.TO) shares fell 3.4 percent to C$40.01 after one of its directors resigned to take up the chief operating officer role at Under Armour, and as CIBC downgraded the stock to “neutral” from “outperform.”
Eldorado Gold Corp (ELD.TO) lost 5.9 percent to C$3.49 after revising downward its 2017 outlook for production from its Kisladag operations in Turkey, while larger gold miners also fell.
The energy group climbed 0.8 percent, with Canadian Natural Resources Ltd (CNQ.TO) up 1.8 percent at C$38.26, as oil prices hit their highest point in a week after a small weekly decrease in U.S. production. [O/R]
Eight of the index’s 10 main groups were in positive territory, with advancers outnumbering decliners by a 2.8-to-1 ratio overall.
Reporting by Alastair Sharp, editing by G Crosse