TSX posts biggest gain in three months as financials, resource shares climb

TORONTO (Reuters) - Canada’s main stock index posted its biggest advance in three months on Tuesday, led by financial sector gains, while higher commodity prices helped boost energy and gold mining shares.

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

The Toronto Stock Exchange’s S&P/TSX composite index closed up 103.11 points, or 0.69 percent, at 15,143.41, its biggest gain since June 1.

Gains for the index came as investor concerns about U.S. tensions with North Korea eased and the financial impact from Hurricane Irma appeared less severe than feared, helping to push stocks on Wall Street to a record high.

“There has been such a lag in Canada that there is definitely a catch-up trade to be had here,” said Mike Archibald, associate portfolio manager at AGF Investments. “It is just a case of can we get a catalyst to get it moving.”

After rallying 17.5 percent in 2016, the TSX has dipped 0.9 percent this year. That compares with a 11.5 percent gain this year for the S&P 500.

One drag on Canada’s market in 2017 has been lower oil prices. But oil rose on Tuesday after OPEC forecast higher demand in 2018.

U.S. crude oil prices settled 16 cents higher at $48.23 a barrel, while the energy group, which accounts for 20 percent of the weight of the TSX, gained 1.4 percent.

Nuvista Energy Ltd jumped 4.8 percent to C$6.84 after it reaffirmed its 2017 guidance.

Potash producer Agrium Inc edged 0.1 percent higher to C$124.44 and Potash Corp of Saskatchewan rose 0.1 percent to C$22.20 after Canada’s Competition Bureau said it will not challenge their proposed merger.

Eight of the index’s 10 main groups ended higher.

The materials group, which includes precious and base metals miners and fertilizer companies, added 0.8 percent, helped by gains for gold miners as the precious metal bounced up from the lowest level in more than a week.

The heavyweight financials group gained 0.7 percent, with Royal Bank of Canada, the country’s largest bank by market capitalization, gaining 0.8 percent to C$91.82 and insurer Manulife Financial Corp adding 1.5 percent to C$24.92.

Home Capital’s shareholders rejected a proposal for Warren Buffett’s Berkshire Hathaway to raise its stake in the company, voting against the board’s recommendation in a third defeat for the U.S. billionaire this year.

Home Capital’s shares climbed 1.8 percent to C$14.33.

Additional reporting by Alastair Sharp; Editing by Meredith Mazzilli and Sandra Maler