Canada Stocks Edge Higher as Oil Surges on U.S. Stockpile Drop

  • Transat tumbles as third-quarter sales fall short of estimates
  • Energy producers account for entire advance in S&P/TSX today

Energy producers dragged Canadian shares to a slight gain after a rally in crude oil sent the group surging by the most since June.

The S&P/TSX Composite Index rose less than 0.1 percent to 14,803.26 at 4 p.m. in Toronto, with nine of 10 groups retreating. Energy shares jumped 2.3 percent to close at the highest level in more than a year.

The rally in oil producers helped Canadian shares rebound after yesterday halting a three-day rally of 1.5 percent as the Bank of Canada warned of weaker inflation and economic growth prospects. The group has carried gains in the past week, with the industry rising a fifth straight day on Thursday as crude in New York topped $47.62 a barrel for a 4.7 percent rally.

Cenovus Energy Inc. and Encana Corp. jumped at least 4.3 percent. Enbridge Inc. climbed 4.7 percent for a fifth day of gains, after the company said this week it’s agreed to acquire a U.S. pipeline company in a $28-billion deal.

Raw-materials producers and banks paced declines Thursday, as Royal Bank of Canada and Toronto-Dominion Bank retreated more than 0.4 percent. The group rallied in August to the highest level since November 2014, helping the broader gauge of Canadian equity to the second-best performance this year among developed nation markets.

Gold producers slumped as the price of gold settled 0.6 percent lower with expectations for a U.S. interest-rate increase scaling back after data hinted at a weaker economy. ECB President Mario Draghi said officials will look at redesigning the bank’s quantitative-easing program. Potash Corp of Saskatchewan Inc. lost 1.6 percent.

The group remains the top-performing industry in Canada this year, fueling a rebound in the S&P/TSX after slumping the most since the 2008 Financial Crisis last year. The group, led by surging gold producers with gold on track for its best annual rally since 2010, is still up 53 percent and set to halt the longest yearly losing streak since 1988.

Holiday tour operator Transat AT Inc. sank 8.1 percent, its biggest drop since March 2015, after third-quarter revenue fell short of the lowest analyst estimate. Transat also postponed a decision on a share buyback and sees fourth-quarter results will be down from year-ago levels.

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