Canada Stocks Rise as Banks Gain on Stimulus Optimism

Canadian stocks rose, as financial companies and energy producers rallied, after investors speculated central banks will continue stimulus measures and oil ended a three-day losing streak.

Bank of Nova Scotia rose 0.7 percent after Canada’s third- largest bank posted better-than-estimated earnings and boosted its dividend. Encana Corp. and Cenovus Energy Inc. added at least 1 percent. WestJet Airlines Ltd. climbed 4.3 percent to a record after saying February traffic and capacity increased.

The Standard & Poor’s/TSX Composite Index (SPTSX) rose 28.63 points, or 0.2 percent, to 12,736.04 at 4 p.m. in Toronto. The benchmark index has gained 2.4 percent this year. Trading was in line with the 30-day average.

Efforts to bolster economic growth are “providing a positive backdrop, in that while the Fed and other central banks might not provide additional stimulus, they’re certainly not going to take their foot off the gas pedal,” Philip Petursson, managing director of the portfolio advisory group with Manulife Asset Management Ltd., said from Toronto. His firm manages about $238 billion.

Federal Reserve Vice Chairman Janet Yellen said yesterday the U.S. central bank should press on with $85 billion in monthly bond buying while tracking possible costs and risks from the unprecedented program. U.S. stocks jumped today, sending the Dow Jones Industrial Average to a record close of 14,253.77.

Banks Rally

Canadian financial companies rallied 0.4 percent as a group, contributing the most to the S&P/TSX index’s gains, as Bank of Nova Scotia (BNS) climbed 42 Canadian cents to C$61.32. The stock rose to a record earlier in the day, adding as much as 1.5 percent after the lender’s first-quarter per-share earnings of C$1.27 beat the C$1.25 average estimate of 16 analysts surveyed by Bloomberg.

Scotiabank joined Royal Bank of Canada and Toronto-Dominion Bank in posting higher quarterly profit, even as Canada’s economic growth began to stagnate on record levels of household debt. Royal Bank added 0.2 percent to C$63.76 and Toronto- Dominion rose 0.5 percent to C$85.43. Both banks reported their results last week.

Energy producers advanced 0.3 percent after oil climbed from its lowest level in 2013 and China vowed to maintain its growth target. Encana increased 21 Canadian cents to C$18.23 and Cenovus rose 31 Canadian cents to C$32.13.

China Growth

China retained an expansion goal of 7.5 percent for this year and plans a 10 percent increase in fiscal spending to support economic growth, the government said. “It gives confidence to the market that there’s a growth commitment on that side of the world, and that’s being felt over here,” Petursson said. Oil climbed 0.8 percent to settle at $90.82 a barrel in New York.

Raw-material producers advanced 0.1 percent as a group after rallying as much as 1.7 percent earlier. Teck Resources added 0.9 percent to C$30.53. Potash Corp. of Saskatchewan Inc. gained 0.5 percent to C$40.43.

WestJet surged 98 Canadian cents to a record C$24.05. The Calgary-based discount carrier said February traffic climbed 7.3 percent and capacity rose 3.1 percent.

TMX Group Ltd., the owner of the Toronto Stock Exchange, is considering more acquisitions to expand its business, Chief Executive Officer Thomas Kloet said. “We are not standing still,” he said. “We will acquire, when appropriate and strategic, key assets -- both small and large -- that advance our business.”

TMX has expanded through acquisitions since Kloet joined the company as CEO in 2008, most recently agreeing to buy Equity Financial Holdings Inc.’s transfer agent and corporate trust services business. TMX rose 1.1 percent to C$55.86 today.

To contact the reporters on this story: Sarah Pringle in New York at springle1@bloomberg.net; Jeremy Herron in New York at jherron8@bloomberg.net

To contact the editor responsible for this story: Michael P. Regan at mregan12@bloomberg.net

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