TORONTO, Dec 23 (Reuters) - Canada’s main stock index rose to its highest level in more than two weeks on Tuesday, led by energy and financial stocks, as the release of stronger-than-expected U.S. and Canadian growth data helped boost investor confidence.
Confidence had already improved following last week’s meeting of the U.S. Federal Reserve, after which the central bank said it would be careful as it looks to raise interest rates next year.
“The market seems to have relaxed in terms of worrying about the interest rate hike in the U.S.,” said Marcus Xu, portfolio manager at M.Y. Capital Management in Vancouver. “At the same time, I think the oil price seems to be finding a bottom here.”
Canada’s stock market, which features a large number of oil and gas stocks, has been hit hard by crude’s sharp fall in recent months.
But oil prices rose after data showed the U.S. economy grew at its fastest rate in 11 years, supporting expectations of greater demand for crude.
Canada’s real gross domestic product (GDP) growth also topped estimates in October thanks to an unexpected surge in manufacturing.
“I don’t see any big-time comeback on the commodities side,” Xu said. “With the oil price and commodity prices coming back just a little bit, the TSX should do fairly OK.”
The Toronto Stock Exchange’s S&P/TSX composite index ended the day up 161.65 points or 1.12 percent at 14,594.03. Nine of its 10 main sectors ended higher.
The index at one point reached 14,597.59, its highest level since Dec. 4.
Energy shares were led by Suncor Energy Inc and TransCanada Corp, with Suncor up 2.5 percent at C$37.80 and TransCanada up 2.5 percent at C$56.82.
Among financial stocks, the best performers included Toronto-Dominion Bank, up 1.3 percent at C$55.16, and Royal Bank of Canada, which rose 1 percent to C$80.24.
Portfolio manager Youssef Zohny said the better-than-expected data boosted equity markets, but noted GDP can be a lagging indicator.
“We can’t read too much into some of the GDP numbers, but given we’re entering the holiday period it seems like markets are looking at 2015 quite optimistically,” said Zohny, who is with StennerZohny Investment Partners of Richardson GMP Ltd. (With additional reporting by Allison Martell and Jeffrey Hodgson; Editing by Meredith Mazzilli and Lisa Shumaker)