TORONTO (Reuters) - Canada’s main stock index rose to its highest in more than a month on Wednesday as the energy sector recovered from an initial decline and a positive budget outlook for the country boosted investor sentiment.
Finance Minister Joe Oliver said Canada will emerge from seven years of budget deficits that followed the 2008 financial crisis and show a C$1.9 billion ($1.7 billion) surplus next year, despite lower oil prices and a package of previously announced tax cuts.
The benchmark TSX recorded its sixth straight daily gain and has rebounded from an eight-month low hit last month.
Energy shares, which have been in focus because of the recent selloff in oil, climbed after slipping in early trading. The group is still down about 23 percent since the middle of June.
“I don’t think the oil price will go much further down. If any of the higher-quality energy stocks can maintain their dividends, they will be very competitive with bonds or cash,” said Stephen Jarislowsky, chairman of fund manager Jarislowsky Fraser.
“Stocks that can increase dividends are going to be in demand,” he added.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 95.93 points, or 0.65 percent, at 14,856.20. All of the 10 main sectors on the index were higher.
Shares of energy producers climbed 1 percent, despite weakness in the price of oil. Suncor Energy Inc added 1.4 percent to C$39.85, and Canadian Natural gained 1.9 percent to C$41.91.
Financials, the index’s most heavily weighted sector, advanced 0.6 percent, with Toronto Dominion Bank rising 1 percent to C$57 and Royal Bank of Canada climbing 0.6 percent to C$82.25.
Valeant Pharmaceuticals International Inc’s shares were up 1.1 percent, at C$148.97, after a report that Actavis Plc is in talks to buy Allergan Inc for at least $60 billion.
Editing by James Dalgleish