Canadian stocks rose for a seventh day after Toronto-Dominion Bank and Canadian Western Bank reported profit increases and pending U.S. home sales unexpectedly climbed.
Bank of Nova Scotia, Canada’s third-largest lender by assets, gained 1.9 percent as the country’s six biggest banks advanced. Harry Winston Diamond Corp. surged 20 percent after posting profit that was more than triple the average analyst estimate. Kinross Gold Corp., the country’s third-largest gold producer, climbed 1.9 percent as the precious metal rallied.
The Standard & Poor’s/TSX Composite Index rose 107.31 points, or 0.9 percent, to 12,111.09, the highest since May 13.
“Over the latter part of the summer, there was really widespread pessimism that the economy was going to roll over and that a double-dip recession was possible,” said Murray Leith, who helps manage C$6.5 billion ($6.2 billion) as a money manager at Odlum Brown Ltd. in Vancouver. “We’ve had a few economic reports of late that suggest that pessimism is a little too extreme.”
The S&P/TSX has gained 4.8 percent during its streak of advances, the longest since February. Data on U.S. economic growth and manufacturing eased concern that the recovery was in jeopardy.
“Canada’s an economically sensitive market, and in so much as the economic outlook looks a little better or a little less worse than everyone had been thinking, it rallies,” Leith said.
The National Association of Realtors in Washington said today its index of pending home resales increased 5.2 percent in July. Most of the 37 economists in a Bloomberg survey had forecast a decrease from June.
Canada’s banks contributed the most to the S&P/TSX’s rally today after Toronto-Dominion and Canadian Western reported record domestic consumer banking profit and record net income, respectively.
Canadian Western, the country’s eighth-largest bank, rose 3.1 percent to C$25.25 after topping the average of eight analyst earnings estimates by 8.2 percent, excluding certain items. TD, Canada’s No. 2 lender by assets, gained 1.5 percent to C$73.17. Scotiabank advanced 1.9 percent to C$52.21.
Manulife Financial Corp., North America’s third largest insurer, increased 2.6 percent to C$12.86, adding on to yesterday’s 5.6 percent surge. The shares plunged 27 percent in August as the Toronto-based company reported a second-quarter loss and investors speculated it would make acquisitions in the U.S. or Asia.
An index of S&P/TSX gold companies rebounded after falling 3.3 percent yesterday as gold futures climbed on speculation interest rates will remain low.
Goldcorp Inc., Canada’s second-largest producer of the metal, climbed 1.1 percent to C$46.18. Iamgold Corp., which mines in Africa, South America and Quebec, rallied 2.5 percent to C$19.57.
Kinross increased 1.9 percent to C$17.93 after forecasting gold production will reach 3.9 million ounces in 2015 after including the assets of Red Back Mining Inc., which Kinross has agreed to buy.
Silver Standard Resources Inc., which explores in Latin America, advanced 4.9 percent, the most since Feb. 5, to C$19.38, as silver futures climbed to a two-year high.
Potash Corp. of Sasktachewan Inc., the world’s largest fertilizer producer, rose 1.5 percent to C$156.25. The chief executive officer of Alberta Investment Management Corp. told BNN Television that Chinese investors approached the pension fund about making a takeover offer for Potash Corp. to rival BHP Billiton Ltd.’s $40 billion unsolicited bid.
Harry Winston Rises
Harry Winston, which mines diamonds and sells jewelry, soared 20 percent, the most in 17 months, to C$12.85. The company said it earned 17 cents a share, excluding certain items, in the second-quarter, compared with the average analyst estimate of 5 cents a share. Mountain Province Diamonds Inc., which explores in northern Canada, rallied 15 percent to a two-year high of C$4.25.
Pharmacy-benefits manager SXC Health Solutions Corp. gained 4.2 percent to a record C$85.17 after announcing a two-for-one stock split to take place on Sept. 17. SXC has advanced 91 percent over the past 12 months.