TORONTO (Reuters) - Banks powered Toronto’s main stock index to close at its highest level in nearly 19 months on Wednesday, encouraged by forecast-beating results from U.S. bank JP Morgan, while upbeat U.S. economic data and firmer commodity prices played supporting roles in the rise.
The index’s financial group led the charge, up 2.03 percent, with all five big banks scoring gains of 2 percent or more as investors anticipated results similar to JPMorgan’s at other U.S. banks, a good omen for Canadian bank results.
Royal Bank of Canada, the country’s biggest lender, shot up 2.99 percent to C$61.31, and Toronto-Dominion Bank added 2.71 percent to C$76.64.
Canadian Imperial Bank of Commerce gained 2.38 percent to C$74.74, while Bank of Montreal rose 2.64 percent C$63. Bank of Nova Scotia was up 2 percent.
Sentiment was further lifted by stronger March retail sales in the United States and by better than expected results from tech heavyweight Intel from Tuesday’s closing bell.
“It’s a spillover from JP Morgan and the U.S. They seem to be driving some of our stocks today. More good news is coming from the commodities side in the energy and the gold,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 102.89 points, or 0.85 percent, at 12,204.41, not far from its session high at 12,211.57. It was the highest closing level since late September 2008 shortly after the index began a deep decline after Lehman Brothers collapsed.
Seven of the index’s 10 main sectors were higher, including the energy and materials groups, which rose as the price of oil turned higher after U.S. government oil inventory data unexpectedly showed a drawdown. Gold prices also rose.
Shares of Suncor Energy Inc rose 0.78 percent to C$35.09, while Goldcorp added 0.86 percent to C$40.10.
On the downside, fertilizer producers put pressure on the materials group after Potash Corp was downgraded by Goldman Sachs.
Potash Corp, the world’s biggest producer of the crop nutrient potash, dropped 2.4 percent to close at C$109.61 after falling as much as 4 percent earlier in the day.
At one point in the morning, weakness in fertilizer stocks dragged the index briefly into negative territory.
Reporting by Ka Yan Ng; editing by Peter Galloway