TSX rises to near six-month high as oil rallies

TORONTO (Reuters) - Canada’s main stock index rose on Wednesday to a near six-month high, led by financial sector and energy stocks after oil turned higher.

A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch

The index has rallied more than 20 percent since hitting a near 3-1/2-year low in January, a threshold considered by some as indicative of a bull market. However, its September 2014 peak at 15,685.13 remains well out of view.

“When oil is stronger, foreign investors consider increasing their weight in Canada, so they are not only buying energy stocks they are buying the whole market,” said Steve Belisle, portfolio manager at Manulife Asset Management.

The heavyweight financial services group rose 0.9 percent. It included a 1.4 percent advance in the shares of Bank of Nova Scotia to C$65.23, while Manulife Financial Corp was up 2.8 percent at C$19.13.

The energy group rose 0.3 percent, led by a 3.3 percent gain for Cenovus Energy Inc to C$18.56.

Oil turned higher after a smaller-than-expected build in U.S. crude inventories and as oil bulls bet that major crude producers would meet again to try to curtail output.

U.S. crude prices settled at $42.63 a barrel, up 3.77 percent.

Earnings season on Wall Street has added to positive sentiment as companies beat lowered expectations, said Belisle.

Consumer staples advanced 1.1 percent, while consumer discretionary stocks were up 0.8 percent.

The Toronto Stock Exchange’s S&P/TSX composite index closed up 44.01 points, or 0.32 percent, at 13,911.29. It touched its highest since Oct. 23 at 13,971.83.

Six of the index’s 10 main groups were higher.

The shares of Canadian Pacific Railway Ltd fell 0.7 percent to C$188.57. The company said it planned to repurchase up to 5 percent of its shares, just over a week after abandoning a bid to buy Norfolk Southern Corp.

Gold stocks also retreated as a firmer tone to the U.S. dollar weighed on gold. Barrick Gold Corp lost 3.1 percent to C$20.06, while Goldcorp Inc declined nearly 2 percent to C$21.57.

Spot gold fell 0.5 percent.

Reporting by Fergal Smith; Editing by Meredith Mazzilli, Toni Reinhold