TSX ekes out gain on banks, resource stocks; TMX Group tumbles

(Reuters) - Canada’s benchmark stock index rose slightly on Tuesday as gains in the resource and financial sectors offset a decline in shares of TMX Group after Scotia Capital and Alberta Investment Management said they would cut their stake in the stock exchange operator.

FILE PHOTO - A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, Ontario, Canada on June 23, 2014. REUTERS/Mark Blinch/File Photo

Shares of TMX tumbled 4.1 percent to C$67.75 after the two companies agreed to reduce their stake in the owner of the Toronto Stock Exchange less than 5 percent apiece.

Bank of Nova Scotia, which owns Scotia Capital, edged up 0.6 percent at C$80.4.

The financial sector overall helped support the market, rising 0.4 percent. Royal Bank of Canada was the biggest lift on the index, rising 0.8 percent to C$97.83, while Toronto Dominion Bank rose 0.6 percent to C$71.67.

The gains helped the Toronto market join in a global equity rally, with world shares extending a run of record highs amid encouraging U.S. data. [MKTS/GLOB]

If the positive tone holds, Toronto stocks could take a run at the record high set earlier this year, said Rick Hutcheon, president and chief operating officer at RKH Investments.

The index is just 1.3 percent away from February’s intraday record level.

“People are beginning to realize rates aren’t going down again any time soon,” Hutcheon said. “If interest rates start going up, then bond valuations are going to go down because they’re obviously inverse and then you start looking for a home for your money.”

The Toronto Stock Exchange’s S&P/TSX composite index ended up 23.51 points, or 0.15 percent, at 15,728.51. Among the index’s 10 main sector groups, just four were in positive territory.

Gold producers climbed 0.9 percent as prices for the commodity turned up from a seven-week low. Teck Resources advanced 3.3 percent to C$28.00, while First Quantum Minerals was up 3.5 percent at C$14.99. [GOL/]

The larger materials sector, which includes miners of precious and base metals as well as fertilizer companies, rose 0.8 percent.

Shares of Pembina Pipeline Corp rose 1.1 percent to C$44.17 a day after the company said it has closed its acquisition of Veresen Inc.

Home Capital Group gained 1.1 percent to C$14.12 after the mortgage lender said two senior executives would be leaving the company, the latest reshuffle in an effort to turn the business around.

The real estate sector reversed course to end down 0.1 percent after Canada’s top banking regulator said new rules designed to cut out risky mortgage lending will be finalised this month and implemented within two to three months.

Reporting by Leah Schnurr in Ottawa, editing by G Crosse