Financial, Energy Shares Boost Canadian Stocks as Oil Gainsby
Benchmark gauge rises for ninth time in 10 trading days
Central bank holds steady on rates before fiscal stimulus
Rallies in financial and energy shares lifted Canadian stocks to the ninth gain in 10 sessions, as the nation’s central bank left interest rates unchanged and crude surged above $38 a barrel in New York.
The Standard & Poor’s/TSX Composite Index rose 81.85 points, or 0.6 percent, to 13,392.90 at 4 p.m. in Toronto, as nine of the 10 main industry groups advanced amid trading volume 6.4 percent higher than the 30-day average. The Canadian benchmark index is the best performing this year among developed markets tracked by Bloomberg.
Higher commodity prices from oil to copper and iron ore have boosted Canada’s resource-rich benchmark index. Still, while raw-materials have rebounded in the past month, they are still well below levels of even two years ago -- 24 percent in the case of copper and 64 percent for crude. Shares in the Canadian gauge now trade at about 21 times earnings, roughly 18 percent more expensive than the valuation of the benchmark U.S. equity index, the S&P 500 Index, according to data compiled by Bloomberg.
Energy and financial stocks, which led declines during a selloff to start the year, contributed the most to Wednesday’s gains. Energy producers added 0.9 percent. Seven Generations Energy Ltd. rose 6.6 percent to its highest price since May after the Calgary-based gas explorer said it sees production for 2016 up 75 percent from prior year.
Financial stocks also rallied as the Bank of Canada kept its benchmark interest rate unchanged as it waits to see how much fiscal stimulus is coming from the federal government. Alaris Royalty Corp. climbed to its highest level since November after the lender reported full-year results. National Bank of Canada rose for a ninth day to cap its longest winning streak since September, sending the stock to its highest level this year.
Health-care stocks gained the most among all the sectors. Valeant Pharmaceuticals International Inc. surged 4.5 percent, while Prometic Life Sciences Inc. jumped 3.2 percent.