July 18 (Bloomberg) -- Shares of Royal Bank of Canada and Toronto-Dominion Bank reached record highs today, lifting an index of the country’s largest lenders.
Royal Bank, Canada’s largest by assets, rose 1.5 percent to C$64.78 at 4:10 p.m. in Toronto, eclipsing the previous peak of C$64.49 on Feb. 20, according to data compiled by Bloomberg. Toronto-Dominion, the second-largest lender, advanced 1.5 percent to C$87.48, surpassing its previous high of C$86.40 on March 30, 2011.
Canadian banks are rising as the nation’s housing market defies predictions of a major slowdown. 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.”
The country’s six other large lenders also climbed, with National Bank of Canada’s 2.1 percent gain leading the 1.4 percent rise of the eight-company Standard & Poor’s/TSX Commercial Banks Index.
The shares 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.”