TORONTO (Reuters) - A surge in shares of Canadian energy companies pushed the country’s main stock index to a near 18-month intraday high on Wednesday as major crude producers reached a deal to curb production.
The energy group, which accounts for one-fifth of the Toronto Stock Exchange’s S&P/TSX composite index, jumped 7.9 percent as crude prices soared. [O/R]
The index ended up 83.04 points, or 0.55 percent, at 15,082.85, for a 2 percent gain in November. It hit 15,141.02 in morning trade, its highest level since June 3, 2015.
Twenty-six stocks posted new 52-week highs.
OPEC members and Russia agreed to limit their oil output in a bid to prop up prices, after Saudi Arabia accepted “a big hit” on production and dropped its demand that arch-rival Iran slash output.
“They’ve found a way to get it done,” said Bryden Teich, portfolio manager at Avenue Investment Management.
If a deal had not been reached oil could easily have slumped below $40 per barrel, he said. Crude instead jumped more than 10 percent to over $50 a barrel. [O/R]
Energy shares accounted for 22 of the 30 most influential gainers in Canada, with several names jumping as much as 17 percent. Suncor Energy Inc rose 6.8 percent to C$42.78 and Canadian Natural Resources Ltd added 8.8 percent to C$45.33. Encana Corp jumped 10.9 percent to C$16.87 and Cenovus Energy Inc advanced 9.6 percent to C$20.77.
The index gain came despite eight of its 10 main groups trading in negative territory.
The financials group slipped 0.7 percent. Shares in Royal Bank of Canada fell 3.4 percent to C$87.08 after the country’s largest lender reported a bigger-than-expected decline in fourth-quarter profit, reflecting lower earnings from its capital markets business and an increase in loans to oil firms turning bad.
Valeant Pharmaceuticals International Inc fell 7.9 percent to C$21.24 as sources said talks to sell a stomach drug business to Takeda Pharmaceutical Co Ltd have stalled.
Gold miners also weighed as bullion prices fell. [GOL/]
Barrick Gold Corp dropped 2.9 percent to C$20.15 and Goldcorp Inc fell 1.8 percent to C$17.73.
Industrials rose 0.8 percent, led by railway stocks.
Canada’s economy accelerated in the third quarter at its fastest pace in more than two years, benefiting from a rebound in oil exports and continued consumer spending, data from Statistics Canada showed.
Reporting by Alastair Sharp; Editing by Meredith Mazzilli