TSX extends 14-week high as energy, bank stocks rise

TORONTO (Reuters) - Canada’s main stock index extended a 14-week high on Thursday, helped by gains for heavyweight banking and energy stocks.

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

“Technically, everything looks like it’s setting up for a break-out,” said Bryden Teich, a portfolio manager at Avenue Investment Management. “We’ve been trending down and the utility space, energy space, the banks now are all bouncing.”

The energy group climbed 1.4 percent, despite oil prices being little changed ahead of a meeting of major oil-producing countries, and financials gained 0.7 percent. Combined, the two groups account for more than half of the index’s weight.

Utilities, which had fallen sharply in the wake of the Bank of Canada’s interest rate hike this month, have recovered somewhat but were down 0.3 percent on the day.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished up 65.32 points, or 0.42 percent, at 15,454.92, its highest close since early June.

Investors bought into financial stocks, which tend to perform better in a higher rate environment, after the Federal Reserve signaled on Wednesday that it may raise U.S. interest rates a third time this year.

Teich said the index could add another 5 percent in the remainder of the year if the Bank of Canada refrains from being too aggressive about its own rate hike outlook.

Bank of Nova Scotia BNS.TO gained 1.8 percent to C$79.33 while Toronto-Dominion Bank TD.TO, Canada's biggest bank by assets, rose 0.7 percent to C$69.01 after it re-entered the Japanese market with a fixed-income sales desk.

The materials group, which includes precious and base metal miners and fertilizer companies, lost 0.2 percent as gold prices fell after the Fed move and copper and other industrial metals lost ground in the wake of a stronger U.S. dollar.

Kinross Gold Corp K.TO fell 2.6 percent to C$5.21, and Barrick Gold Corp ABX.TO lost 0.8 percent to C$20.15.

Half of the index’s 10 main groups ended higher, with five advancers for every three decliners.

Reporting by Alastair Sharp; Editing by Lisa Von Ahn and James Dalgleish