TORONTO (Reuters) - Canada’s main stock index rose to a one-week high on Tuesday as shares of banks and other financial sector companies climbed, while the energy sector weighed as oil prices hit six-week lows intraday.
The financials group, which accounts for 35 percent of the index’s weight, gained 0.6 percent as investors braced for the outcomes of Federal Reserve and Bank of Japan policy meetings on Wednesday.
Today’s rally shows that investors still have faith in major central banks to keep interest rates low, said Ian Scott, a portfolio manager at Manulife Asset Management.
The interest-rate-sensitive telecommunications sector rose 0.5 percent, while both the consumer discretionary and consumer staples sectors gained more than 0.8 percent and technology stocks advanced 1.3 percent.
“There has just been a shift toward some info-tech (information technology stocks) lately in general because they do have some good growth,” Scott said.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 25.75 points, or 0.18 percent, at 14,521.98. It touched its highest since Sept. 12 at 14,573.25.
Seven of the index’s 10 main groups ended higher.
The energy group fell 1 percent as U.S. oil prices CLc1 fell to the lowest in six weeks before settling modestly higher. [O/R]
One of the most influential weights on the index was Encana Corp (ECA.TO), which fell 7.6 percent to C$12.04 after the natural gas producer said late on Monday it will issue 107 million new shares to raise just more than $1 billion.
Cenovus Energy Inc (CVE.TO) declined 1.3 percent to C$17.52.
The materials group, which includes precious and base metals miners and fertilizer companies, edged 0.1 percent higher.
Barrick Gold’s (ABX.TO) Veladero gold mine in Argentine, closed by the government last week after a solution containing cyanide leaked, could resume operations in the next two weeks, the company’s president said on Monday.
Its shares were unchanged at C$22.71.
Agrium Inc AGU.TO advanced 0.8 percent to C$119.81. The company’s CEO said that tough farm conditions make it the right time for a merger with Potash Corp of Saskatchewan Inc POT.TO.
Canadian interest rates will stay low for longer as the economy faces strong headwinds and business investment is weaker than expected, but government spending on infrastructure will help growth, Bank of Canada Governor Stephen Poloz said.
Additional reporting by Alastair Sharp; Editing by Nick Zieminski and James Dalgleish