Canada Stocks Rise Most in Month as Oil Jumps on Supply Decline

Canadian stocks rose the most in a month as energy producers rallied with oil following an industry report showing a drop in U.S. inventories.

BlackPearl Resources Inc. and Pacific Rubiales Energy Corp. added at least 4.2 percent as crude in New York climbed to a one-month high. Royal Bank of Canada increased 1.2 percent to pace gains among bank stocks. Rio Alto Mining Ltd. sank 7.5 percent after agreeing to buy Sulliden Gold Corp. in an all-stock deal worth about C$300 million ($274.32 million). Sulliden soared 33 percent.

The Standard & Poor’s/TSX Composite Index rose 124.67 points, or 0.9 percent, to 14,649.86 at 4 p.m. in Toronto, the most since April 16. The S&P/TSX is little changed in May. The gauge has rallied for 10 months, the longest winning streak in three decades.

“Crude is really helping the market,” said Stephen Gauthier, chief investment officer at Fin-XO Securities Inc. in Montreal. His firm manages about C$650 million. “Oil stocks have done very well since the beginning of the year so that certainly helps.”

The Canadian equity benchmark trades at a price-earnings ratio of 19.7, near the highest level since 2011, data compiled by Bloomberg show.

Crude advanced 1.7 percent to settle at $104.07 a barrel. U.S. stockpiles decreased 7.23 million barrels last week, according to the Energy Information Administration. Crude imports fell to the lowest level since 1997 while U.S. output climbed to a 28-year high.

The S&P/TSX Energy Index has rallied 14 percent this year, the most among 10 industries in the benchmark gauge. The group jumped 1.3 percent today, as nine of the industries advanced on trading volume 14 percent lower than the 30-day average.

Pacific Rubiales

NuVista Energy Ltd. climbed 5.7 percent to C$10.83 and BlackPearl Resources added 4.2 percent to C$2.48. Pacific Rubiales gained 6.9 percent to C$19.65 after Alfa SAB, a conglomerate with energy assets in Mexico and the U.S., bought shares to grow its stake to the third-largest in the company.

Royal Bank of Canada increased 1.2 percent to C$74.29, a record, and Toronto-Dominion Bank added 0.7 percent to C$51.90. The two lenders, the largest in the nation, are scheduled to report second-quarter earnings tomorrow.

CI Financial Corp. rose 2.4 percent to C$33.87 after Geoffrey Kwan, analyst at RBC Capital, raised his rating for the stock to outperform, the equivalent of a buy. Onex Corp. rallied 2 percent to C$63 as the S&P/TSX Financials Index advanced 0.8 percent, the most in three months.

Encana Corp. added 2.7 percent to C$25.50 for a second day of gains after increasing the size of its initial public offering for PrairieSky Royalty Ltd. to as much as C$1.46 billion, in what would be Canada’s largest initial sale in 14 years.

Gold Deal

Rio Alto Mining slumped 7.5 percent to C$1.97, the lowest since January, after agreeing to buy Sulliden Gold to expand its production of the precious metal. Rio Alto will pay 0.525 of its shares for each Sulliden share, along with 0.1 share of a newly incorporated company that will hold Sulliden’s stake in the East Sullivan property in Quebec.

Sulliden soared 33 percent to C$1.04, the biggest increase since December 2008.

Bombardier Inc. dropped 1.3 percent to C$3.88. Republic Airways Holdings Inc., Bombardier’s biggest customer for the CSeries jet, said its order for 40 of the aircraft is no longer a priority. Chief Executive Officer Bryan Bedford said the Indianapolis-based company hasn’t made any decisions about the order.

Before it's here, it's on the Bloomberg Terminal.