Canada Stocks Jump With Crude on Report OPEC Will Reduce Output

  • Oil cartel to lower production to 32.5 million barrels a day
  • BlackBerry stops making smartphones, shifts focus to software

Canadian stocks halted a three-day slide as energy producers jumped the most since February after OPEC agreed to cut production for the first time in eight years, while BlackBerry Ltd. rose to the highest in six months after saying it will stop making smartphones.

The S&P/TSX Composite Index surged 1.2 percent to 14,731.43 at 4 p.m. in Toronto, extending gains in afternoon trading after sinking 1.6 percent in the past three sessions. The index has advanced 4.7 percent since the end of June, the most in two years.

That’s made Canadian stocks more expensive than U.S. peers, with a price-to-earnings ratio of 23.5 maintaining a 15 percent premium over the S&P 500 Index. The current valuation of Canadian equities is near the highest levels in 14 years, according to data compiled by Bloomberg.

Canadian Natural Resources Ltd. and Crescent Point Energy Corp. surged at least 5.9 percent to lead a 3.7 percent rally among energy producers as nine of 11 industries in the S&P/TSX advanced. Financial companies increased 0.8 percent, with Manulife Financial Corp. up 1.4 percent, while Bank of Nova Scotia rose 1 percent.

Crude soared 5.3 percent in New York, settling at $47.05 a barrel for the biggest gain since April. Producers in the Organization of Petroleum Exporting Countries said they will drop production to 32.5 million barrels a day, nearly 750,000 barrels lower from what it pumped in August, according to a delegate briefed on the matter. The group had adopted a pump-at-will policy in 2014.

Saudi Arabia and Iran had earlier signaled they wouldn’t come to any agreement on production cuts at the meeting in Algiers, while laying groundwork for a deal at the next official meeting in Vienna. Instead, this deal points to a new phase in relations for the two nations, which have clashed on oil policy in the past.

Energy and raw-materials producers are the top-performing industries in Canada this year, fueling a rebound in the wider gauge after slumping the most since the 2008 financial crisis last year. The S&P/TSX Materials Index is up 51 percent and set to halt the longest yearly losing streak since 1988, while energy producers are second with a 22 percent gain.

BlackBerry rallied 4.6 percent to the highest since March, as the Waterloo, Ontario-based company said it will hand over production of its once-iconic smartphones to overseas partners to focus on its more profitable software business. BlackBerry also reported second-quarter adjusted earnings at break-even, compared with expectations for a loss, while revenue fell short of analysts’ projections.

DHX Media Ltd., the children’s TV programming company, lost 3.3 percent to close at the lowest in almost three months after reporting fourth-quarter adjusted earnings and sales that trailed analysts’ estimates. The company also boosted its dividend.

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