Canada Stocks Close Higher as Crude Rebounds on U.S. Supply Data

  • China imports and exports data for September disappoint
  • Crude holds at $50 in New York as fuel supplies drop at hub

TSX Movers: Valeant, Advantage Oil & Gas, Aritzia

Canadian stocks rebounded from a 1 percent selloff to post a second day of gains, as crude advanced after supplies at a key U.S. hub fell and groups that offer high dividend yields rose.

The S&P/TSX Composite Index climbed 0.2 percent to 14,643.71 at 4 p.m. in Toronto, erasing losses as selling in global equities eased . The Canadian gauge pared its October loss to 0.6 percent after capping a third monthly gain. The index is up almost 13 percent this year, making it the second-best performing developed market equity index in the world just behind New Zealand and in a close race with the U.K.

Seven of 11 industries in the benchmark for Canadian equity advanced, led by a 0.5 percent increase in among energy producers. Real estate investment trusts and consumer staples producers advanced 0.6 percent, as demand for high equity payouts grew amid a rally in global bonds sent government debt yields lower.

Oil closed higher in New York after data showed supplies at Cushing, Oklahoma, the delivery point for U.S. oil futures, fell 1.32 million barrels. Suncor Energy Inc. and Encana Corp. increased at least 1.1 percent. Energy producers account for 21 percent of the Canadian benchmark by weighting.

Meanwhile base-metals producers Teck Resources Ltd. and First Quantum Minerals Ltd. dropped more than 1.1 percent as disappointing China trade data rekindled concerns about the global economy. China is Canada’s second-biggest trading partner and a key source of demand for resources. A gauge of world developed and developing markets tumbled a third day to the lowest level in a month. The S&P 500 Index lost 0.3 percent in New York.

Commodities producers have powered gains in Canada this year, fueling a rebound in the wider gauge after a weak 2015 when the benchmark equity index posted its worst loss since the 2008 financial crisis. The S&P/TSX Materials Index is up 38 percent and set to halt its longest yearly losing streak since 1988. Energy producers are second with a 26 percent gain.

Canadian stock valuations remain 16 percent higher than their U.S. peers, with the S&P/TSX carrying a price-to-earnings ratio of 23.4 compared with 20.1 for the the S&P 500 Index, according to data compiled by Bloomberg.

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