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By Leah Schnurr
TORONTO, Jan 29 (Reuters) - The Toronto Stock Exchange’s main index climbed on Tuesday as energy issues strengthened and Canadian Pacific Railway (CP.TO) reported it more than doubled its fourth-quarter profit, pushing industrials higher.
CP Rail, Canada’s No. 2 railway, ended up C$2.36, or 3.6 percent, at C$67.26 after it posted an increase in profit, helped by lower income tax rates. CP Rail helped lift the industrials sector 2.2 percent.
The heavyweight energy sector gained 0.7 percent as crude prices rose on expectations that OPEC would maintain output levels and hopes of a U.S. interest rate cut.
Investors were awaiting the U.S. Federal Reserve’s next decision on interest rates, due on Wednesday, and optimism over another rate cut also helped lift the index.
“The trend is I think we’re on tenterhooks — tomorrow is the showtime,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
“I can’t say there’s any direction at this point in time, there’s so much focus on what’s going to be said (by the Fed).”
The S&P/TSX composite index .GSPTSE closed up 59.53 points, or 0.46 percent, at 13,046.43 with six of its 10 main groups higher and one flat. It was the second day in a row the index finished on the upside. It has ended higher in five out of the last six sessions.
It was also the first time the index has closed above the 13,000 level in almost two weeks, after a massive five-day nosedive on fears over the health of the U.S. economy.
Royal Bank of Canada (RY.TO) finished up despite saying it will write down its exposure to a bond insurer in its first-quarter results. Royal, Canada’s biggest bank, edged up 28 Canadian cents, or 0.6 percent, to C$49.98.
Neil Andrew, portfolio manager at Leeward Hedge Funds, said that despite Royal’s writedown, “From a macro perspective, we view the Canadian financial sector to have been overly beaten up as of late and was just due for an oversold bounce.”
Elsewhere on the earnings front, TransCanada Corp (TRP.TO) reported fourth-quarter profit soared 40 percent, boosted by recent pipeline acquisitions. The company also upped its quarterly dividend by 6 percent. Shares of TransCanada rose 88 Canadian cents, or 2.3 percent, to C$38.88.
Shares of supermarket chain Metro Inc MRUa.TO dipped after it reported slightly higher first-quarter profit as increased competition and a “learning curve” associated with its new information systems offset a tax expense decrease.
Metro, Canada’s third-largest food retailer, finished down C$1.85, or 7.2 percent, at C$24.00.
Cheese maker Saputo Inc (SAP.TO) added C$1.05, or 4 percent, to C$27.52 after it said it will buy Wisconsin-based Alto Dairy Co-operative for $160 million.
Market volume was 364 million shares worth C$6.5 billion. Advancers outpaced decliners 857 to 710. The blue chip S&P/TSX 60 index .TSE60 closed up 3.97 points, or 0.52 percent, at 765.82.
In New York, investors were also focused on Wednesday’s Fed decision, as hopes of another rate cut pushed the financial sector higher.
The Dow Jones industrial average .DJI closed up 96.41 points, or 0.78 percent, at 12,480.30, and the Nasdaq composite .IXIC edged up 8.15 points, or 0.35 percent, to 2,358.06.
$1=$1.00 Canadian Editing by Rob Wilson