TORONTO: Canada’s main stock index extended its recent run to a more than nine-month high on Tuesday as oil and gas stocks jumped with buoyant crude prices and heavyweight financial stocks also rose.
Oil prices hit 2016 highs, with U.S. crude settling above $50 for the first time in almost a year, helping Canada’s heavyweight energy sector notch a 3 percent gain.
Overall, the Toronto Stock Exchange’s S&P/TSX composite index closed up 89.45 points, or 0.63 percent, at 14,365.61, its highest since mid-August.
Canadian Natural Resources Ltd gained 4.2 percent to C$40.01 and Suncor Energy Inc added 1.9 percent to C$36.50 while pipeline operator Enbridge Inc advanced 1.3 percent to C$54.49.
“My view is that we can see oil continuing to provide a lift to the TSX, but I don’t think it’s going to be smooth between now and the end of the year,” said Philip Petursson, chief investment strategist at Manulife Investments.
He said oil could push above $55 a barrel this year but could also slip to the mid-$30s in a ‘summer doldrums’ scenario or if OPEC surprised with a supply increase.
The energy group accounts for almost 20 percent of the Canadian index’s weight and its direction has largely driven the index so far this year.
The financials group, more than one third of the index’s weight, gained 0.8 percent.
Seven of the index’s 10 main groups were in positive territory, with rising stocks almost doubling decliners.
The most influential gainers included Royal Bank of Canada , which rose 0.8 percent to C$79.95, and Bank of Nova Scotia, which added 1.8 percent to C$67.07.
But the overall gains were capped by a sharp fall in shares of Valeant Pharmaceuticals International Inc, which settled down 15 percent at C$31.47.
The embattled drug company slashed its 2016 forecasts as its new chief executive said he would focus on rebuilding the reputation of a “distracted organization” with a debt-loaded balance sheet.
Canadian National Railway Co added 0.5 percent to C$77.44 after announcing its CEO would step down for medical reasons.
