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CANADA STOCKS-TSX up as Fed hike talk boosts banks; energy stocks fall

Published 2017-02-07, 04:26 p/m
© Reuters.  CANADA STOCKS-TSX up as Fed hike talk boosts banks; energy stocks fall
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* TSX ends up 41.86 points, or 0.27 percent, at 15,498.80

* Nine of TSX's 10 main groups move higher

* Energy group down 0.9 percent

By Alastair Sharp

TORONTO, Feb 7 (Reuters) - Canada's main stock index rose on Tuesday, with gains among heavyweight financial stocks on talk of a U.S. interest rate hike in March offsetting losses for shares of energy companies as oil prices weighed.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE settled up 41.86 points, or 0.27 percent, at 15,498.80. Nine of its 10 groups rose, although advancers only outnumbered decliners by a 1.2-to-1 ratio overall.

"We've got a broad-based rally but it doesn't have a huge velocity to it," said Peggy Bowie, a senior trader at Manulife Asset Management. "Volumes are light and the market is quiet."

She said Canadian financial stocks likely have more room to run as the prospect of higher interest rates from the U.S. Federal Reserve push bond yields up and support earnings growth.

Philadelphia Federal Reserve Bank President Patrick Harker said on Monday he was open to raising interest rates at the U.S. central bank's March policy meeting if growth in jobs and wages continued. most influential movers on the Canadian index included Bank of Nova Scotia BNS.TO , up 1.1 percent at C$79.06, and the country's biggest bank, Royal Bank of Canada RY.TO , which rose 0.6 percent to C$95.28.

The financials group, which accounts for 35 percent of the index's weight, gained 0.6 percent overall.

The energy group fell 0.9 percent as concerns about rising U.S. shale production weighed on crude oil prices. O/R

Canadian Natural Resources Ltd CNQ.TO lost 2.4 percent to C$37.99 and Encana Corp ECA.TO fell 3 percent to C$15.60.

Parex Resources Inc PXT.TO ended 3.1 percent higher at C$16.06 after the oil and gas company active in Canada and Colombia replaced its chief executive officer and said its proved plus probable reserves had grown 37 percent. posted a second consecutive monthly trade surplus for the first time in more than two years in December, but booming oil exports obscured weakness in some key sectors. Brands International Inc QSR.TO advanced 2.7 percent to C$66 after the owner of the Burger King and Tim Hortons chains provided some 2016 earnings guidance ahead of its full release next week. Airlines Ltd WJA.TO declined 2.5 percent to C$21.69 despite reporting a higher-than-expected quarterly profit. Gold Inc AKG.TO slumped 12.4 percent to C$4.31 after analyst downgrade and Pretium Resources Inc PVG.TO fell 1.7 percent to C$15.92 after it said its costs had increased as it moved to complete a speedier construction of its Brucejack mine.

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