TORONTO (Reuters) - Canada’s main stock index edged higher on Monday in light trading volume, as gains for several big banks that reported earnings last week offset losses for resource stocks.
The financials group, which had been pressured recently by investor concerns about the country’s potentially overvalued real estate market and elevated levels of household debt, gained 0.2 percent.
“I think you have to go back to the fundamentals of the Canadian banks,” said Sadiq Adatia, chief investment officer, Sun Life Global Investments.
“They don’t really need to see a massive amount of growth ... their balance sheets are good for them to continue on with their dividend yields and even for them to increase that dividend yield”
Bank of Nova Scotia BNS.TO, which is due to report its earnings on Tuesday, ended up 0.3 percent at C$76.12.
The gains were offset by losses for some gold mining stocks even as the price of the precious metal XAU= held near a one-month high.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 4.98 points, or 0.03 percent, at 15,421.91. Five of the index's 10 main groups ended higher.
Volumes were the lowest since July 3, 2015. Markets in China, the United States and Britain were closed for public holidays.
The TSX rose 17.5 percent in 2016. But it has gained less than 1 percent this year, lagging most other major markets.
Delays to U.S. stimulus and an uncertain outlook for the North American Free Trade agreement have added to headwinds for the index, Adatia said.
Bombardier rose 3.6 percent to C$2.33. BMO Capital upgraded the stock to outperform from market perform after it said on Friday it delivered its first CS300 aircraft to customer Swiss International Air Lines AG.
The broader industrials group gained 0.3 percent, with Canadian Pacific Railway Ltd CP.TO up 0.4 percent to C$214.49.
Its rival, Canadian National Railway Co CNR.TO, faces the threat of a strike on Tuesday morning after the railroad announced new work rules in the midst of negotiations to replace a contract that expired last year. Its stock was off 0.3 percent at C$103.38.
Additional reporting by Alastair Sharp; Editing by James Dalgleish and David Gregorio
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