TORONTO (Reuters) - Canada’s main stock index rose to a four-month high on Thursday as higher oil prices supported energy stocks, while the financial and industrial sectors also gained.
The move followed the U.S. Federal Reserve’s scaling back of its expectation of how many rate hikes it could implement this year, which weighed on the U.S. currency and boosted risk appetite.
The index closed above its 200-day moving average and has rebounded 18 percent since hitting an almost 3-1/2-year low in January, supported by a recovery in crude oil prices and stabilization in global financial markets.
“It’s quite significant from a technical point of view,” said Elvis Picardo, strategist at Global Securities in Vancouver.
“Given the strength of the global economy there is going to be doubts about the sustainability, but I got to say on current form it looks quite good,” he added.
The energy group climbed 1.8 percent, while financials gained 1.6 percent.
U.S. crude CLc1 prices settled at $40.20 a barrel, up 4.52 percent.[O/R]
Industrials also contributed to the rally, including a 2.4 percent advance in the shares of Canadian National Railway Co (CNR.TO) to C$81.83.
“As the index has moved higher we have seen the strength percolate to other (non-resource) sectors as well,” said Picardo.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 143.17 points, or 1.06 percent, at 13,621.3. It touched its highest since Nov. 4 at 13,685.45.
Eight of the index’s 10 main groups ended higher.
The two exceptions were the materials group, which includes precious and base metals miners and fertilizer companies, and healthcare.
The materials group fell 0.5 percent, including a 3.6 percent drop in Barrick Gold Corp (ABX.TO) to C$19.21.
Spot gold XAU= dipped 0.4 percent after surging in the previous session.
Valeant Pharmaceuticals International Inc (VRX.TO) was down 11.8 percent at C$38.66 after sources told Reuters that the company’s creditors are preparing tough demands for default negotiations.
The overall healthcare sector fell 2.7 percent.
The fallout for Valeant has affected some of the other big names in the sector, said Picardo.
Reporting by Alastair Sharp; Editing by Meredith Mazzilli and David Gregorio