TSX rises to two-week high as resource stocks rally

TORONTO (Reuters) - Canada’s main stock index rose to a more than 2-week high on Tuesday as rising oil and gold prices supported resource stocks, while shares of financial companies also climbed in a broad-based rally.

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

The materials group, which includes precious and base metals miners and fertilizer companies, added 3.3 percent, while the energy group was up 0.9 percent.

“It’s largely been driven by oil and gold, but that’s sort of the way its been over the last couple of months,” said John Stephenson, president & CEO at Stephenson & Company Capital Management.

Spot gold rose 0.5 percent, while U.S. crude oil futures settled 35 cents higher at $50.29 a barrel as expectations of OPEC output curbs lifted prices. [O/R]

Teck Resources jumped 6 percent to C$27.10, touching its highest since February 2014, after several banks upped their price targets and outlooks for the stock on Monday.

The most influential gainers on the index also included Barrick Gold Corp, up 2.9 percent to C$21.47, and pipeline company TransCanada Corp, which advanced 1.5 percent to C$62.08.

Gains on Wall Street added to the positive backdrop for Canada’s market as a host of solid U.S. earnings reports put corporate profits on track to snap a four-quarter streak of declines.

“I think people are quite nervous about the earnings season in general, but so far so good,” Stephenson said.

The heavyweight financials group gained 0.9 percent and industrials rose 0.8 percent.

The Toronto Stock Exchange’s S&P/TSX composite index closed up 155.73 points, or 1.07 percent, at 14,752.25.

Nine of the index’s 10 main groups were in positive territory, with only consumer discretionary stocks lagging.

Stocks can continue to gain ground, but reduced global growth amid more trade protectionism, aging demographics and lower Chinese growth will restrain gains, said Stephenson.

Amaya Inc fell more than 8 percent to C$18.65 after the online gambling company said it had abandoned merger talks with Britain’s William Hill.

Canadian manufacturing sales in August jumped much more than expected on widespread strength, reinforcing expectations that broad economic growth rebounded in the third quarter.

OceanaGold Corp’s Toronto-listed stock advanced 6.1 percent to C$4.01 after the Australian miner provided an update on its Philippines operations.

Additional reporting by Alastair Sharp; Editing by Will Dunham and Sandra Maler