- Central bank revises Canada 2016 GDP growth to 1.7 percent
- Copper, iron ore rallies lead base metals producers higher
Canadian stocks rose a fourth day, rallying to the highest since November, as the nation’s largest lenders advanced after the Bank of Canada backed away from cutting interest rates amid signs fiscal policy is boosting growth prospects.
The Standard & Poor’s/TSX Composite Index rose 0.7 percent to 13,671.35 at 4 p.m. in Toronto, extending a four-day winning streak to 3.1 percent. The S&P/TSX remains one of the best-performing developed markets in the world this year with a 5.1 percent gain.
The Bank of Canada kept its key interest rate at 0.5 percent, where it’s been since cuts in January and July, in a decision released Wednesday from Ottawa. Gross domestic product will grow 1.7 percent this year instead of the 1.4 percent the central bank expected in January. Faster growth allows Governor Stephen Poloz to back away from his suggestion in January he was inclined to cut rates again.
Financial services stocks added 1.1 percent, as Bank of Nova Scotia and Royal Bank of Canada added at least 1.4 percent. Eight of 10 industries in the S&P/TSX advanced on trading volume 4 percent less than the 30-day average.
The resource-dominant S&P/TSX remains tied to commodities prices, as crude and gold prices have found some footing in the second quarter after stumbling at the beginning of April.
Raw-material producers have been the top-performing industry in Canada this year, rallying 28 percent. Gold prices have soared 17 percent as investors scaled back projections for U.S. rate increases. The Canadian benchmark now trades at 21.7 times earnings, about 15 percent higher than the 18.9 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
HudBay Minerals Inc. and Labrador Iron Ore Royalty Corp. added at least 2.4 percent as base metals rose with iron ore above $60 a metric ton. China’s exports jumped the most in a year while declines in imports narrowed, adding to evidence the world’s second-largest economy is stabilizing. China is also Canada’s second-biggest trading partner after the U.S.
Valeant Pharmaceuticals International Inc. rose 3.9 percent, reversing an earlier loss, as the drugmaker’s outgoing Chief Executive Officer Michael Pearson has now agreed to comply with a congressional subpoena to give a deposition before a Senate committee investigating drug pricing, after previously refusing to do so.
The drugmaker earlier said it will have four fewer days to file its financials before lenders can demand loan repayment after the company received a default notice from some of its bondholders.