TORONTO (Reuters) - Canada’s main stock index touched a more than two-week high on Wednesday, bolstered in part by National Bank of Canada and upbeat sentiment about Canadian economic growth.
National Bank (NA.TO), the latest Canadian bank to report better-than-forecast quarterly results, was one of the biggest positive drivers of the index. Shares rose 3.4 percent to C$57.29. The overall financials group added 0.3 percent.
“Generally the theme is (banks) beat on revenue, they have impressive efficiency gains, they’re well capitalized,” said Paul Gardner, partner & portfolio manager at Avenue Investment Management.
“And if you’re telling me rates are going up eventually in Canada, that’s a tailwind, not a headwind ... Everything’s in place to create a good environment for banks.”
A batch of robust economic data for the second quarter has set expectations that Canada’s gross domestic product data, due on Thursday, will show a 3.7 percent rise. Markets have almost fully priced in an October interest rate hike by the Bank of Canada.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE rose 50.43 points, or 0.33 percent, to finish at 15,133.13. It touched 15,174.14 during the session, its strongest level since mid-August.
Of the index’s 10 main groups, six were positive.
“Banks are cheap, yield plays are cheap ... Canada’s on sale,” said Gardner, adding that Canadian equities should outperform U.S. equity markets over the next three to four months.
CAE Inc (CAE.TO), which provides training for the aviation, defense and healthcare industries, rallied 3.3 percent to C$20.63 after Bank of Montreal raised its rating on the company to outperform from market perform.
Technology stocks added 1.3 percent, with Shopify Inc (SHOP.TO) jumping 4.7 percent to C$136.82.
Oil and gas companies retreated 0.2 percent in a volatile session as lower oil prices CLc1 LCOc1 weighed. Canadian Natural Resources (CNQ.TO) fell 1.6 percent to C$38.36.
Crude remained under pressure as historic flooding and damage from Topical Storm Harvey shut more than 20 percent of U.S. refining capacity. [O/R]
Prometic Life Sciences (PLI.TO) jumped another 9.3 percent to C$1.64, extending the previous session’s 25-percent surge after the U.S. Food and Drug Administration granted the company a rare pediatric disease designation for its plasminogen replacement therapy.
The healthcare group rose 2.0 percent.
Advancing issues outnumbered declining ones on the TSX by 164 to 80, for a 2.05-to-1 ratio on the upside.
Reporting by Solarina Ho; Editing by James Dalgleish