TSX rises as commodities rally; ends 1 percent lower for week

TORONTO (Reuters) - Canada’s main stock index edged higher on Friday as commodities rallied and global worries about Britain voting to leave the European Union next week abated.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

Still, the index fell 1 percent for the week and has pulled back 3.8 percent from a recent 10-month peak as markets became jittery ahead of Britain’s referendum.

Reasonable earnings, economic recovery and low interest rates are supportive of stocks, but lack of clarity about the outcome of the referendum and related volatility may restrain investors near-term, said Irwin Michael, portfolio manager at ABC Funds.

“People don’t want to hold anything that could have some speculation or risk to it,” he said.

Canada’s currency will weaken and the chances its central bank cuts interest rates would jump if Britain votes next week to leave the European Union, strategists warn, noting the result could hit global growth and spell bad news for commodity-exporting countries.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 19.36 points, or 0.14 percent, at 13,901.77. But just four of the index's 10 main groups ended higher.

The most influential sector by far was energy, which rallied 1.4 percent. It was led by a 1.6 percent advance in the shares of Canadian Natural Resources CNQ.TO to C$37.79, while Suncor Energy Inc SU.TO climbed 0.9 percent to C$34.34.

Suncor has launched an auction of its Petro-Canada lubricants division, people familiar with the matter said.

Oil prices rose for the first time in a week as the dollar fell and investors in global markets cautiously bought some riskier assets. U.S. crude oil futures CLc1 settled up $1.77 at $47.98 a barrel.

The materials group, which includes precious and base metals miners and fertilizer companies, added 0.1 percent, while spot gold XAU= advanced 1.6 percent.

Saskatchewan is considering whether to end a review of its potash royalty system, the economy minister of the Canadian province said.

Potash Corp of Saskatchewan POT.TO rose 1.7 percent to C$21.82.

The financials group ended little changed. Fairfax Financial Holdings Ltd FFH.TO fell 1.1 percent to C$643.08. But Brookfield Asset Management Inc BAMa.TO advanced 2.8 percent to C$44.10.

Royal Bank of Canada RY.TO firmed 0.4 percent to C$77.60. Canada's largest bank by market capitalization plans further expansion in the United States following its $5 billion acquisition of Los Angeles-based City National in November, Chief Executive Dave McKay said.

Canada’s annual inflation rate cooled in May on cheaper gasoline and a slowdown in price increases for food.

Additional reporting by Alastair Sharp in Toronto; Editing by Bernadette Baum and Matthew Lewis