TORONTO (Reuters) - Canada’s main stock index rose to a 16-month high on Friday as shares of energy and materials companies led broad-based gains and investors raised bets on a rate cut from the Bank of Canada.
For the week, the commodity-linked TSX rose 2.4 percent, helped by a 15-month high on Wednesday for U.S. crude oil. It was the biggest one-week gain for the index since March.
“People might be speculating that if the loonie goes on another down-leg that could help the Canadian economy again,” said Colin Cieszynski, senior market analyst at CMC Markets Canada.
The Canadian dollar tumbled to a seven-month low against the U.S. dollar after weaker-than-expected domestic retail sales and inflation data fueled interest rate cut bets.
A weaker currency increases the competitiveness of Canada’s exporters.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 91.12 points, or 0.61 percent, at 14,939.04, its highest close since June 2015.
The most influential movers on the index included Suncor Energy Inc, which rose 1.1 percent to C$39.19, and Tourmaline Oil Corp, which jumped 6.4 percent to C$38.73.
Canadian rig contractor Precision Drilling Corp reported a smaller-than-expected quarterly loss, helped by lower operating costs, and raised its capital budget for the year after winning new contracts.
Its shares rose 4.1 percent to C$6.40, while the overall energy group was up 0.9 percent as oil prices climbed.
U.S. crude prices settled 22 cents higher at $50.85 a barrel.
The materials group, which includes precious and base metals miners and fertilizer companies, added 0.9 percent, helped by a 2.7 percent gain for mining company Turquoise Hill Resources Ltd to C$4.12.
A nearly 11 percent gain for Celestica Inc to C$15.30 helped push the information technology group 0.4 percent higher, while the heavily weighted financial services sector firmed 0.5 percent.
Consumer staples was the only one of the index’s 10 main groups that declined, while industrials rose 0.7 percent despite a 1.1 percent drop in the shares of Bombardier Inc to C$1.76.
The plane and train maker will shed jobs for the second time this year, cutting about 10 percent of its global workforce over two years as it deepens turnaround efforts at its rail division.
Canada’s trade minister walked out of talks in Belgium, declaring that the European Union was incapable of sealing a planned transatlantic free trade deal designed to boost growth in both economies.
Reporting by Fergal Smith; Editing by David Gregorio and Lisa Shumaker