Canadian Stocks Rise as Energy Producers Offset Manulife Slideby
Manulife tumbles on profit miss; BCE, TMX climb on results
Commodities producers climb as crude rallies for second day
Canadian stocks edged higher, as energy producers climbed with crude oil to offset declines paced by Manulife Financial Corp. after its earnings disappointed.
The S&P/TSX Composite Index rose 0.1 percent to 14,528.78 at 4 p.m. in Toronto, after falling as much as 0.3 percent. The benchmark is less than 1 percent from a one-year high reached two weeks ago. Trading volume today was 3.2 percent lower than the 30-day average at the close.
Manulife fell 5.4 percent for the seventh drop in eight sessions, as investors weighed earnings from more than a dozen companies today. The nation’s largest life insurer reported second-quarter earnings short of analysts’ estimates as hedging costs and lower investment gains hampered growth. Financial shares in the benchmark lost 0.5 percent.
Energy companies in the benchmark surged 1 percent, as crude futures in New York rallied 2.7 percent to climb above $41 a barrel. Veresen Inc. jumped 11 percent, to the highest level since October, after the energy infrastructure company said it was pursuing a sale of its power generation business. Enbridge Inc. added 1.5 percent.
BCE Inc., Canada’s largest phone company, rose 0.9 percent after profit topped predictions as it increased spending to fuel subscriber growth. TMX Group Ltd., owner of the Toronto Stock Exchange, jumped the most since March to a record close after posting record quarterly sales. Cott Corp. surged 9.6 percent as the beverage maker agreed to buy S&D Coffee Inc. while earnings fell just short of expectations.
Canadian Pacific Railway Ltd. tumbled 3.1 percent, the most in almost six weeks, after Bill Ackman’s Pershing Square Capital Management LP announced it is unloading its entire stake in the railway. The move comes almost five years after Ackman sparked a turnaround at the company and becoming its biggest shareholder.
The Canadian equity benchmark is hanging onto a 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 23 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.
The S&P/TSX Gold Index added 0.6 percent as gold prices rose to near the highest in three weeks after the Bank of England unveiled an “exceptional” stimulus package including the first rate cut in seven years as policy makers slashed growth forecasts after Britain’s decision to leave the European Union.