TORONTO (Reuters) - Canada’s main stock index rallied on Wednesday as strength in crude oil prices supported energy and banking stocks, although paring gains after the U.S. Federal Reserve interest rate decision.
The index extended its recovery from a recent three-year low, touching its highest level since Jan. 8 at 12,524.13.
It is still reflecting “the positive price action out of the oil commodity,” said Sid Mokhtari, market technician and director, institutional equity research at CIBC World Markets.
U.S. crude prices settled at $32.30 a barrel, up 2.7 percent after Russia said it was discussing the possibility of co-operation with the Organization of the Petroleum Exporting Countries. [O/R]
But the U.S. Federal Reserve frustrated investors hoping for a strong sign it might scale back future interest rate hikes because of recent financial and economic turmoil.
The financial services index rose 1.3 percent. It included a 1.7 percent advance for Toronto-Dominion Bank to C$51.72, while Royal Bank of Canada was up 1.5 percent at C$68.63.
Canadian Natural Resources Ltd rose 4.8 percent to C$27.68. The overall energy group was up 1.5 percent.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 46.45 points, or 0.38 percent, at 12,377.77. Five of the index’s 10 main groups were in positive territory.
Recent recovery in the Canadian dollar has added to support for Canadian stocks, according to Mokhtari. The currency made a three-week high before reversing lower.
“Many foreign flows have left Canada because of the devaluation of the currency,” said Mokhtari.
Rising sales in export markets for information technology company CGI Group Inc helped boost its shares 4.0 percent to C$57.72.
Gold stocks rallied as gold climbed to a 12-week high. Barrick Gold Corp rose 3.7 percent to C$13.89, while spot gold was up 0.4 percent at $1,124.93 an ounce.
A disappointing earnings report pushed Rogers Communications Inc stock down 5.4 percent to C$48.13.
Shares of train and plane maker Bombardier fell below C$1 for the first time since 1991, reflecting the company’s struggle to find customers for its new CSeries planes. The stock has fallen 26 percent since the start of 2016, and closed at C$0.99, down 2.0 percent.
The most influential drags also included convenience store operator Alimentation Couche-Tard, which fell 3 percent to C$60.28, and Tim Hortons and Burger King owner Restaurant Brands International, which lost 3.7 percent to C$46.33.
Reporting by Alastair Sharp; editing by Tom Brown and Grant McCool