Canada Stocks Rise Third Day as Banks, Oil Producers Advance

  • Oil reverses losses as report shows U.S. output at 2014 low
  • Canadian Pacific falls after first-quarter revenue declines

Canadian stocks rose a third day, trading at a five-month high, as the nation’s lenders advanced and energy producers reversed losses after oil rebounded on U.S. data showing output fell, while silver producers extended gains.

The benchmark Standard & Poor’s/TSX Composite Index equity gauge added 0.3 percent to 13,911.29 at 4 p.m. in Toronto, the highest level since October. The benchmark gauge is one of the best-performing developed markets in the world this year with a 6.9 percent gain.

Bank of Nova Scotia and Toronto-Dominion Bank climbed at least 0.9 percent as financial services stocks increased 0.7 percent, contributing the most to gains in the S&P/TSX. Seven of 10 industries in the index advanced on trading volume about 26 percent higher than the 30-day average.

Raw-materials producers declined 0.9 percent as declines among gold producers offset extended gains among silver and base metals mining companies. Silver advanced to a May high a day after entering a bull market, extending gains this month to 11 percent. Precious metals have been popular this year, with gains in both gold and silver exceeding 18 percent. Silver is up 24 percent since Dec. 14, meeting the common definition of a bull market.

Cenovus Energy Inc. and PrairieSky Royalty Ltd. rallied at least 3.3 percent to lead energy producers to a 0.3 percent advance. Crude in New York rose 3.8 percent, climbing to the highest level in almost five months. Oil output fell to 8.95 million barrels a day in the week ended April 15, the lowest since October 2014, while rig counts also slipped to a November 2009 low last week. OPEC members and other producers plan to meet in Russia, possibly in May, to again discuss a potential production cap, Iraq’s Deputy Oil Minister said.

The resource-dominant S&P/TSX remains closely linked to moves in commodities prices, as a rebound in producers has fueled a 17 percent recovery for the S&P/TSX from a low on Jan. 20. The Canadian benchmark now trades at 22.1 times earnings, about 15 percent higher than the 19.2 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

Canadian Pacific Railway Ltd. lost 0.7 percent, after falling as much as 3.7 percent. The railroad operator reported first-quarter revenue slipped 4 percent to C$1.59 billion from year-ago levels. While Canadian Pacific posted profit ahead of consensus estimates while also boosting its dividend, investors were perhaps looking for a larger buyback than the company unveiled, BMO Capital Markets analyst Fadi Chamoun said in a note. Canadian Pacific will buy back as much as C$1.31 billion in stock.

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