July 18 (Bloomberg) -- Shares of Royal Bank of Canada and Toronto-Dominion Bank are approaching record highs, lifting an index of the country’s largest lenders.
Royal Bank, Canada’s largest lender by assets, rose 1.3 percent to C$64.60 at 11:34 a.m. in Toronto, its highest intraday price since Feb. 25. A close at that level would be a record high after taking into account stock splits, eclipsing the previous peak of C$64.49 on Feb. 20, according to data compiled by Bloomberg.
Toronto-Dominion, the second-largest bank, advanced 1.5 percent to C$87.42, its highest intraday in almost two years. The Toronto-based lender’s previous record closing price was C$86.40 on March 30, 2011.
Canadian banks are rising as the nation’s housing market defies predictions of a major slowdown. Canadian existing home sales rose 3.3 percent in June, almost matching the previous month’s gain that was the fastest in more than two years, according to Canadian Real Estate Association data.
“The housing market data coming out of Canada has been encouraging,” Brad Smith, an analyst at Stonecap Securities Inc., said in a telephone interview from Toronto. “People are no longer anticipating a hard landing in Canada.”
Canada’s four other large lenders also climbed, with the eight-company Standard & Poor’s/TSX Commercial Banks Index gaining 1.2 percent.
The banks also may be rising on comments by U.S. Federal Reserve Chairman Ben S. Bernanke, who reiterated today that the central bank will act if necessary to combat too-low inflation, Smith said.
“Bernanke’s signaling that he may be getting cold feet on tapering,” Smith said. “That gets translated back into the stock market.”