TORONTO (Reuters) - Canada’s main stock index notched its fourth straight day of gains on Friday, with the heavily weighted financials and materials sectors leading the way as investors sought value after a bleak couple of months.
The index had slipped below 14,000 for the first time since mid-January last week, as investors fretted about slumping oil prices and slowing Chinese demand for commodities.
It fell 0.6 percent in July, after a 3 percent decline in June.
But banking stocks shook off those fears, coupled with short bets that a stretched housing market could hurt them, gaining 0.4 percent.
“The whole ‘shorting Canada’ is usually a short-term phenomena, because let’s face it, our financial sector has been a great place to be invested over the long term,” said Julie Brough, vice president at Morgan Meighen & Associates.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE added 3.3 percent on the week, closing up 85.66 points, or 0.60 percent, at 14,468.44.
The rise came despite losses in oil and gas stocks, which were hurt by a drop in crude prices after output numbers showed OPEC producers were pumping near record levels into an already oversupplied market. [O/R]
U.S. crude CLc1 fell 3.6 percent to $46.79 a barrel, while Brent LCOc1 lost 3 percent to $51.70. [O/R]
“You’ll get some trading rallies, but it’s going to be very hard to create a sustained period of strength in the energy sector,” Brough said.
The mining-heavy materials group gained 2.8 percent, with shares of Goldcorp Inc (G.TO) jumping 6 percent to C$17.45 and Agrium Inc AGU.TO adding 2.2 percent to C$133.80.
“We’ve really taken a beating here in Toronto in the last little while,” said Rick Hutcheon, president of RKH Investments.
“People are beginning to troll for stocks that appear to have some lasting long-term structural value, good management. ... At some stage, things fall to a point at which value starts to surface and we may be there.”
Gildan Activewear (GIL.TO) was the most influential loser, falling 7.6 percent to C$42.18 after the clothing maker’s quarterly results fell short of expectations.
Additional reporting by Solarina Ho; Editing by Peter Galloway and Jonathan Oatis