Canada Stocks Rise, Halt Three-Day Slide as Oil Resumes Advance

  • Teck Resources jumps after surprise first-quarter profit
  • Husky Energy slumps on quarterly loss, pipeline stake sale

Canadian stocks rose for the first time in four days as energy producers advanced with crude oil.

The benchmark Standard & Poor’s/TSX Composite Index rose 0.1 percent to 13,809.44 at 4 p.m. in Toronto, paring gains in the final hour of trading. The equity gauge managed to snap the longest losing streak in three weeks after fluctuating in morning trading. The gauge is one of the best-performing developed markets in the world this year with a 6.2 percent gain.

Teck Resources Ltd. added 4.8 percent after reporting a surprise first-quarter adjusted profit to lead raw-materials producers higher as five of 10 industries increased. Industrial stocks sank 2.2 percent to offset some gains, led by a 1 percent decline in Canadian National Railway Co.

Canadian National slid to the lowest since March 3 after the country’s largest railroad operator cut its full-year profit target for the first time in eight years amid weaker-than-expected demand for commodities including coal and crude. Adjusted earnings for 2016 will be in line with 2015’s C$4.44 a share, down from earlier forecasts of a mid to single-digit increase for the year, the Montreal-based company said in a statement Monday.

Encana Corp. and Crescent Point Energy Corp. climbed at least 2.1 percent as energy stocks advanced 0.4 percent. Crude futures gained 3.3 percent in New York, trading above $44 a barrel to a five-month high amid signs that a global surplus is gradually diminishing, even as markets remain oversupplied.

The resource-dominant S&P/TSX remains closely linked to moves in commodities prices, with a 17 percent rally in the benchmark equity gauge from a Jan. 20 low aligning with a rebound in crude from the lowest levels since 2003. Raw-materials and energy producers are the two top-performing industries in Canada so far this year, up more than 13 percent.

The Canadian benchmark now trades at 22 times earnings, about 14 percent higher than the 19.2 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

Bombardier Inc. rallied 8.9 percent, for the highest close since July, after the aircraft manufacturer signed a firm order with Chorus Aviation Inc. valued at $229 million for five aircraft with an option for five more.

Husky Energy Inc. sank 9.2 percent, the most since October, after the energy company raised C$1.7 billion in relief for some of its Canadian pipelines from Li Ka-Shing, Hong Kong’s richest man, who controls the company. A couple of Li’s other units bought 65 percent of Husky’s midstream operations, which will continue to be run by Husky. The energy producer also posted a C$458 million loss in the first quarter, compared with a profit a year ago.

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