- Longest winning streak since August gives stocks gain for 2016
- Canadian Natural jumps on plan to slash 2016 capital budget
The Canadian economy’s commodity-heavy tilt has returned to being a boon for the nation’s financial markets.
The benchmark equity index extended its winning streak to six days, the longest since August, as beaten-down energy and mining shares continued a rebound amid rising resource prices.
The Standard & Poor’s/TSX Composite Index rose 0.8 percent to 13,123.65 at 4 p.m. in Toronto, pushing the six-day gain to 3 percent. The surge has erased a loss for the year that almost reached 10 percent, leaving the Canadian benchmark and shares in New Zealand as the only markets in the developed world in positive territory.
Shares in the Canadian benchmark trade at almost 22 times earnings, roughly 20 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.
European stocks halted on Thursday their longest winning streak since October, while U.S. shares rose as investors awaited February’s jobs data.
Canadian energy stocks have been on a tear, soaring 20 percent and outpacing rallies by U.S. and global counterparts since hitting a decade-low in January. The S&P/TSX Energy Index has erased losses in 2016, now up 3 percent for the year, pushing ahead after the group lagged peers last year.
Raw-materials and energy producers rallied the most in the S&P/TSX as seven of 10 industries advanced. Trading volume was 21 percent higher than the 30-day average. Gold rose to a one-month high as copper extended a rally.
Canadian Natural Resources Ltd., Canada’s largest heavy-crude producer, surged 9 percent for the biggest gain in more than four years. The energy producer lowered its 2016 capital budget about 22 percent, now targeting spending of C$3.5 billion to C$3.9 billion this year, down from as much as C$5 billion in November. Canadian Natural also reported an 89 percent decline in fourth-quarter profit.
Valeant Pharmaceuticals International Inc. fell 4.2 percent to a 2013 low. Valeant’s head of U.S. dermatology products is departing the company, a move the drugmaker said is unrelated to any action taken by an ad hoc board committee probing the company’s dealings with a controversial mail-order pharmacy. Shares of Valeant have plunged 75 percent from an August high amid intense scrutiny from investors and lawmakers over its pricing practices.