Canada Stocks Rise to 9-Month High as Banks, Energy Shares Climb

  • BMO jumps after raising payout as profit falls on writedown
  • Energy producers advance as oil approaches $50 a barrel

Canada Holds Key Rate Steady

Canadian stocks rose to the highest level since August, as higher crude prices bolstered the nation’s energy producers and Bank of Montreal’s results added to a rally among lenders.

The S&P/TSX Composite Index added 0.7 percent to 14,053.74 at 4 p.m. in Toronto, a level last seen on Aug. 18. The gauge hasn’t closed above 14,000 since August. The index has climbed 8.2 percent this year, second most among developed-market nations tracked by Bloomberg.

Global shares jumped 1 percent today, as European and American financial firms paced gains on growing conviction the Federal Reserve will raise interest rates this summer and Britain will vote to remain in the European Union.

In Canada, the central bank kept its key interest rate unchanged, signaling the economy will contract this quarter as Alberta wildfires cut oil production. Governor Stephen Poloz held the benchmark interest rate at 0.5 percent, where it’s been since July. Higher U.S. rates weakens the Canadian dollar, making Canada more attractive for foreign investment.

For more on the Bank of Canada decision, click here.

Bank of Montreal rose 1.4 percent for a third day of gains that have put the stock at its highest since September 2014. The lender said second-quarter fiscal profit fell 2.6 percent as soured oil-and-gas loans soared and the firm took a restructuring charge. The bank raised its dividend 2.4 percent to 86 cents a share.

Canadian Western Bank and Bank of Nova Scotia added 1.3 percent as financial firms in the Canadian benchmark climbed to the highest level in nearly a year.

Six of 10 industries in the S&P/TSX advanced on trading volume in line with the 30-day average. The S&P/TSX now trades at 21.4 times earnings, about 11 percent higher than the 19.3 times valuation of the S&P 500.

Canadian Natural Resources Ltd. rose 2.1 percent. Energy producers added 1.5 percent, rising a second day. Oil traded above $49 a barrel. All of the Canadian oil-sands facilities that workers fled last week as a wildfire spread are being allowed to prepare for restart.

The Bloomberg Commodity Index rebounded from a two-day drop, posting it’s biggest gain in two weeks. That lifted raw-material producers 1.8 percent adding to a year-long rally for the group, which has been the best performer in the index with a rally of more than 30 percent.

Commodities producers make up about a third of the S&P/TSX by market capitalization Resource prices came under pressure last week as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher.

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