Canada Stocks Advance as Energy Producers Jump Amid Oil Rebound

  • Crude gains most in 3 weeks as U.S. gasoline inventories drop
  • Mining stocks slip as Rio Tinto posts worst profit since 2004

Energy producers drove Canadian stocks higher, as crude prices climbed the most in three weeks after U.S. gasoline stockpiles saw the biggest drop since April.

The S&P/TSX Composite Index rose 0.2 percent to 14,512.05 at 4 p.m. in Toronto, after closing Tuesday at the lowest since July 11. Trading volume today was 7.8 percent below the 30-day average at the close. 

Energy companies in the benchmark surged 1.4 percent, the biggest contributor to gains in the S&P/TSX as six of 10 industries advanced. Husky Energy Inc. increased 6.9 percent, the most since January, after resolving a dispute with Cnooc Ltd. over prices from an offshore Chinese energy project by lowering prices. Suncor Energy Inc. and Canadian Natural Resources Ltd. added at least 1.4 percent.

Crude for September delivery jumped 3.3 percent to close at $40.83 a barrel in New York, the biggest gain since July 12. Gasoline inventories dropped 3.26 million barrels last week, an Energy Information Administration report showed. Refineries’ crude demand jumped 266,000 barrels a day from the prior week.

Saputo Inc. rose 5.3 percent, the most since December 2009. TD Securities analyst Michael Van Aelst raised his rating for the stock to buy from hold after the dairy company posted fiscal first-quarter earnings Tuesday that topped the highest analysts’ estimates while raising its dividend.

Brookfield Asset Management Inc. climbed 1.3 percent after its infrastructure arm, Brookfield Infrastructure Partners LP, said it plans to raise its distribution as well as a three-for-two unit split. Brookfield Infrastructure added 0.7 percent.

Concordia International Corp. added 1.6 percent to help lift the health-care group after confirming that a strategic review of its options is ongoing. Valeant Pharmaceuticals International Inc. bounced 5.3 percent to snap a three-day, 10 percent drop.

Barrick Gold Corp. and Franco-Nevada Corp. lost at least 1.1 percent, leading a 1 percent drop in raw-materials producers, as gold and silver futures prices retreated. Mining stocks fell as Rio Tinto Group Plc, the world’s second-largest mining company, posted its worst profit since 2004 due to depressed prices for iron ore, aluminum and copper.

The Canadian equity benchmark is hanging onto a nearly 12 percent gain in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 22.9 for the S&P/TSX, about 13 percent higher than the S&P 500 Index.

Mining and energy stocks have propelled Canada to the second-best performance among developed markets this year, trailing only New Zealand fueled by a rally in commodities prices from gold and crude to base metals.

Before it's here, it's on the Bloomberg Terminal.