July 4, 2014 / 2:43 PM / in 6 years

CANADA STOCKS-In quiet trade, railways and financials inch TSX higher

By Alastair Sharp
    TORONTO, July 4 (Reuters) - Canada's main stock index rose
in quiet trade on Friday, trading just off the previous
session's record high as banks, insurers and railroads gained
while U.S. markets stayed closed for the Independence Day
    Those industries either gain directly from rising economic
growth across North America or from the prospect of rising
interest rates pushing government debt yields higher.
    "The railroads are pretty much a coincident indicator. That
is to say, if you get rising GDP growth, then that very quickly
gets reflected in freight volumes," said Bob Gorman, chief
portfolio strategist at TD Waterhouse.
    Canadian National Railway gained 1 percent to
C$70.29, and Canadian Pacific Railway Ltd added 0.7
percent to C$197.45. Both have gained in value as oil is
increasingly sent across the continent by rail.
    Gorman said both banks and insurers should gain from rising
government debt yields, but that the insurers have more room to
grow due to sterner valuations.
    By mid-morning, the Toronto Stock Exchange's S&P/TSX
composite index was up 28.24 points, or 0.19 percent,
at 15,235.57. That was just short of the index's highest ever
level, 15,256.36, which it hit during Thursday trading.
    The index reached a record high this week for the first time
since 2008. The previous record high had stood since before the
global financial crisis roiled equity and other markets.
    "It's been a long time since we set that record, so we're
really just playing catch-up here," TD's Gorman said.
    Bank of Nova Scotia gained 0.9 percent to C$72.07,
Toronto-Dominion Bank added 0.4 percent to C$55.33, and
Manulife Financial Corp rose 0.7 percent to C$21.71.

 (Editing by Chris Reese)
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