TORONTO (Reuters) - Toronto’s main stock index shot to its highest point since early September 2008 on Tuesday, fueled by rallying resource issues and by a rise in financials sparked by the Bank of Canada’s decision to hold interest rates steady.
Most of the top gainers were resource issues, which drew support from firmer prices for gold, silver, copper and palladium. The index’s materials and oil and gas groups each posted advances greater than 1 percent.
“Some of this is on the tailwind of a weaker U.S. dollar, stronger commodity prices, and this is helping the Canadian equity markets,” said John Kurgan, senior market strategist at Lind-Waldock.
Teck Resources climbed 3 percent to C$63.84, while Barrick Gold Corp advanced 1.98 percent to C$47.81.
The price of oil, however, was a key resource that lost ground on Tuesday. But investors largely took the modest decline in the crude price in stride. Suncor Energy rose 1.57 percent to C$38.79, and Canadian Natural Resources climbed 1.78 percent to C$42.40.
“Maybe it might be of a little concern, as a commodities trader, that crude oil is down where most other commodities are up with a weaker U.S. dollar,” Kurgan said. “It might be a little bit of a red flag. But oil is still trading north of $90. People are looking well past (today’s decline).”
The Toronto Stock Exchange’s S&P/TSX composite index finished up 119.09 points, or 0.89 percent, at 13,559.20.
The market rallied toward the session’s end and finished just off the day’s high of 13,565.62, which was its highest level since September 2, 2008.
Nine of its 10 main sectors were higher, and telecoms were unchanged.
Financials rose 0.31 percent, boosted by the outlook for continued low interest rates after the Bank of Canada kept its overnight rate target at 1 percent on Tuesday. [ID:nN18290983]
“The Bank of Canada indicating that they aren’t going to change interest rates for the time being is being taken as good news,” said Michael Sprung, president of Sprung & Co Investment Counsel. “The banks are happy with that, so that should help their net interest margin a little bit here.”
Royal Bank of Canada rose 0.3 percent to C$54.13, while Bank of Montreal gained 0.39 percent at C$59.68.
Toronto-Dominion Bank gained 0.55 percent to C$76.52, aided by a rise in quarterly profit at U.S. brokerage TD Ameritrade Holding Corp, in which TD has a 46 percent stake.
In individual company news, Brookfield Asset Management jumped 3 percent to C$33.28 after it agreed to buy 113.3 million shares of mall operator General Growth Properties Inc from Fairholme Fund for about $1.7 billion. [ID:nN18195468]
DundeeWealth finished up 0.19 percent at C$21.54 after its board of directors approved the payment of a special cash dividend of C$2 a share. Meanwhile, Bank of Nova Scotia, up 0.26 percent at C$56.84, extended the deadline on its offer to buy those shares of DundeeWealth that it does not already own.
Reporting by Ka Yan Ng and Claire Sibonney; editing by Peter Galloway