TSX gains amid U.S. optimism, led by resource shares

TORONTO (Reuters) - Canada’s benchmark stock index rose on Monday as recent strength in commodity prices supported the energy and materials groups, while a fresh record high for the Dow Jones industrials boosted investor confidence.

A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014. REUTERS/Mark Blinch

Wall Street has rallied since the U.S. election as investors bet that President-elect Donald Trump will deliver significant economic stimulus and cuts in corporate taxes and regulations.

U.S. optimism “is carrying over into our market,” said Brian Pow, vice president, research at Acumen Capital Partners.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 42.65 points, or 0.28 percent, at 15,095.17. Seven of the index's 10 main groups ended higher.

The broad rally is “indicative of a little bit more confidence in what’s going on,” Pow said.

The index has rallied 16 percent this year. On Thursday, it touched a near 18-month high intraday at 15,149.54.

The materials group, which includes precious and base metals miners and fertilizer companies, gained 1 percent despite a drop in gold mining stocks.

Potash Corp POT.TO gained 2.4 percent to C$24.58, while copper producer First Quantum Minerals Ltd FM.TO jumped 5.8 percent to C$15.61.

A private survey showing growth in China’s services sector accelerated to a 16-month high in November supported copper and other metals.

Copper prices CMCU3 advanced 3.3 percent to $5,950.15 a ton, having last week reached $6,045.50, the highest since June 2015.

Gold futures GCc1 fell 0.5 percent to $1,169.5 an ounce as investors shrugged off concern about political instability in Italy.

The energy group rose 0.6 percent, but pared some gains as oil prices turned lower.

U.S. crude oil futures CLc1 settled up 11 cents at $51.79 a barrel, but retreated in post-settlement trade as the market lost confidence OPEC cuts would be sufficient to reduce oversupply given increased U.S. drilling.

Large banks also helped boost the index, with Royal Bank of Canada RY.TO rising 0.2 percent to C$87.92 and Toronto-Dominion Bank TD.TO adding 0.4 percent to C$63.60.

Industrials rose 0.4 percent as railroad stocks gained ground.

The Canadian oil-producing province of Alberta will offer C$500 million in royalty credits to Pembina Pipeline Corp PPL.TO and Inter Pipeline Ltd IPL.TO for their petrochemical projects, the government said, as it seeks to diversify its ailing economy.

Pembina Pipeline fell 0.8 percent to C$39.30, while Inter Pipeline was down 0.7 percent at C$27.55.

Additional reporting by Alastair Sharp; Editing by Meredith Mazzilli