Canada Stocks Rise After 2-Day Loss as Lenders, Utilities Gain

Updated on
  • Investors await start of key U.S. Federal Reserve meetings
  • Penn West Petroleum gains after raising cash from asset sale

Canada stocks rose, after a two-day drop, as utilities and financial services companies rallied before a key meeting of U.S. central bank policy makers.

Financial stocks climbed 0.7 percent as all 10 industries in the benchmark equity gauge advanced. Fortis Inc. increased 3.4 percent to pace a 2.6 percent advance in utilities stocks.

Energy producers advanced as oil prices in New York rose. Metals mining companies climbed as copper rose. The gold market has gone quiet ahead of U.S. Federal Reserve meetings, with volume about 47 percent below the 100-day average.

The Standard & Poor’s/TSX Composite Index rose 109.37 points, or 0.8 percent, to 13,462.71 at 4 p.m. in Toronto.

Canadian stocks have slid 2.9 percent this month after slumping 4.2 percent in August for the worst performance in a year, amid a rout among global financial markets following China’s shock currency devaluation. China is Canada’s second-largest trading partner after the U.S.

Pessimism remains acute over the outlook for Canada’s largest stocks, with derivatives traders raising their bets that the turmoil in global equity markets will continue.

Short positions have more than quadrupled since the beginning of 2015 and the ratio of put to call options remains elevated in the C$9.5 billion ($7.2 billion) iShares Standard & Poor’s/TSX 60 exchange-traded fund, according to data compiled by Bloomberg.

The resource-rich S&P/TSX has been one of the worst-performing developed markets in the world this year as crude plunged. Energy and raw-materials producers have the biggest declines among 10 industries in the S&P/TSX this year.

Penn West Petroleum Ltd. surged 6.1 percent after agreeing to sell its properties in the Mitsue area of central Alberta for C$192.5 million in cash. The company plans to use the proceeds to pay down debt. Energy producers added 0.1 percent, paring an earlier gain, led by a 3 percent rally in Tourmaline Energy Corp.

Silver Wheaton Corp. jumped 3.1 percent and HudBay Minerals Inc. increased 4.7 percent as raw-materials producers advanced 0.5 percent as a group. Copper futures for December delivery rose 0.9 percent in New York.

The U.S. Federal Reserve begins two days of meetings in Washington Wednesday, with traders predicting about a 28 percent chance the central bank will raise interest rates.