Canada Stocks Rise With Oil as World Markets Recover From Brexit

  • S&P/TSX rises for first time since shock U.K. vote last week
  • Bombardier soars after firming Air Canada order for C Series

Canadian stocks rose, bouncing back from the steepest two-day slide since February, as equity markets around the world rallied for the first time since the U.K.’s surprise vote to leave the European Union.

The S&P/TSX Composite Index rose 1.1 percent to 13,842.69 at 4 p.m. in Toronto, after the benchmark posted a two-day retreat of 3.1 percent through Monday, the biggest since February as global markets churned in the wake of the U.K. referendum. The S&P/TSX remains negative in June, with a 1.6 percent loss for the month and on pace to halt a four-month rally.

Energy producers and the nation’s largest lenders contributed the most to gains in the S&P/TSX as nine of 10 industries advanced. Royal Bank of Canada and Toronto-Dominion Bank increased more than 1.5 percent as lenders rebounded from the lowest level in more than two months. Industrial producers increased 1.6 percent, led by gains in the railroad operators. Only materials producers fell, led by gold miners as demand for haven assets faltered.

Bombardier Inc. jumped 5 percent, the most in two months, after the struggling aircraft manufacturer finalized a firm order with Air Canada for 45 C Series jets. The sale is valued at $3.8 billion based on list prices.

Suncor Energy Inc. and Canadian Natural Resources Ltd. rose at least 1.7 percent to lead energy stocks higher as all but two members of the S&P/TSX Energy Index advanced. Crude futures in New York rose 3.3 percent, after slumping 7.5 percent over the previous two sessions.

Raw-materials producers are the only laggards in the broader index, slipping 0.6 percent as a group as gold retreated after its biggest two-day surge in seven years. Barrick Gold Corp. dropped 2.6 percent, after soaring 12 percent in the previous two sessions.

Canadian equities have fared relatively better compared with global markets this year, led by a resurgence in commodities prices. A gauge of raw-materials producers has jumped 47 percent while energy stocks jumped 14 percent.

The S&P/TSX is neck-and-neck with New Zealand as the top-performing developed markets in the world in 2016, with the countries now the only two among 24 in positive territory, according to data compiled by Bloomberg. It’s a far cry from 2015, when the S&P/TSX was one of the worst markets in the world, slumping the most since the 2008 financial crisis.

Canadian shares remain more expensive relative to their U.S. peers. The S&P/TSX now trades at 21.3 times earnings, about 13 percent higher than the valuation of the S&P 500 Index.

Global markets rebounded as the S&P 500 Index increased 1.8 percent, recovering from the lowest close since March on Monday. First-quarter U.S. economic growth rose at a 1.1 percent annualized rate, exceeding previous estimates of 0.8 percent on improved trade and business investment. EU leaders are gathering for a two-day European Council summit to discuss Britain’s exit.

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