TSX advances as jump in oil price spurs energy rally

TORONTO (Reuters) - Canada’s main stock index rose on Wednesday as a jump in the price of oil to a six-week high sent energy stocks rallying across the board.

Businessmen pass the Toronto Stock Exchange sing in Toronto, Ontario, Canada July 6, 2017. REUTERS/Chris Helgren

More than half of the index’s 10 most influential gainers were energy names, with Suncor Energy Inc rising 2.2 percent to end at C$38.56. Canadian Natural Resources Ltd added 1.7 percent to C$38.39. Encana Corp jumped 4.7 percent to C$12.53 while Crescent Point Energy Corp surged 8.6 percent to C$9.83.

The overall energy group saw its biggest one-day gain in more than two months, rising 3.0 percent.

Oil prices jumped nearly 2 percent after a U.S. report showed a bigger weekly draw than expected in crude and gasoline stocks, along with an unexpected drop in distillate inventories.

“That caused not only a pop in the oil price, but a group that has been disappointed has now turned around,” said John Ing, president of Maison Placements Canada.

“Demand remains very strong even in the so-called summer driving season.”

U.S. West Texas Intermediate crude for August settled up 72 cents, or 1.6 percent, at $47.12 on its second to last day as the front month. [O/R]

The Toronto Stock Exchange’s S&P/TSX composite index rose 95.14 points, or 0.63 percent, to finish at 15,244.71.

Of the index’s 10 main groups, eight were in positive territory.

Financial services companies gained 0.5 percent, with Manulife Financial Corp up 1.4 percent at C$25.30.

Dairy producer Saputo Inc soared 5.0 percent to C$42.42 after RBC raised the company’s rating to “outperform” from “perform”. Consumer staples rose 0.7 percent.

The utilities sector ended up 0.5 percent. Hydro One Ltd stock will likely be in the spotlight on Thursday after the Canadian utility firm announced after markets closed that it will acquired U.S. rival Avista Corp.

Canada’s two largest railways ended lower, dragging the overall industrials group down 0.6 percent. Canadian Pacific Railway, finished down 1.3 percent at C$203.60. The rail operator posted a better-than-expected second-quarter profit after markets closed, attributed to earnings from higher shipments of commodities.

In economic data, Canadian manufacturing sales posted the largest gain in five months in May, rising 1.1 percent to C$54.6 billion ($43.2 billion) from April, topping forecasts and hitting a record level on higher sales of motor vehicles and parts, data from Statistics Canada showed.

Advancing issues outnumbered declining ones on the TSX by 169 to 70, for a 2.41-to-1 ratio on the upside.

Reporting by Solarina Ho; Editing by James Dalgleish