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CANADA STOCKS-TSX posts record high as oil prices, bond yields climb

Published 2017-02-14, 04:51 p/m
© Reuters.  CANADA STOCKS-TSX posts record high as oil prices, bond yields climb
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* TSX closes up 29.45 points, or 0.19 percent, at 15,786.03

* Index rises for the sixth straight day, posts new record high

* Five of the TSX's 10 main groups end higher

By Fergal Smith

TORONTO, Feb 14 (Reuters) - Canada's main stock index posted a fresh record high on Tuesday as higher oil prices and bond yields supported energy and financials, while auto suppliers benefited from U.S. President Donald Trump's warm words for Canadian trade the day before.

Bond yields jumped after Federal Reserve Chair Janet Yellen said it would be unwise to wait too long to raise U.S. interest rates. yields reduce the value of insurance companies' liabilities and increase banks' net interest margins.

Manulife Financial Corp MFC.TO rose 1.5 percent to C$24.95, while the overall financials group advanced 0.3 percent.

The group has soared more than 13 percent since the U.S. presidential election, helped by the prospect of U.S. economic stimulus and deregulation.

"Canadian banks are getting a bit pricey," said Ian Scott, equity analyst at Manulife Asset Management.

"You are seeing a bit of a move but just not nearly as much as you have seen in the past."

The consumer discretionary group climbed 0.7 percent, with Magna International Inc MG.TO gaining 1.2 percent to C$59.10.

Auto supplier stocks such as Magna had been held back by investor worries of a proposed U.S. border adjustment tax, Scott said.

Imposition of such a measure would "hit Canadian exports hard," said the C.D. Howe Institute in a research report.

On Monday, Trump said he only wants to tweak trade ties with Canada.

But his pledge to renegotiate the North American Free Trade Agreement (NAFTA) to focus on Mexico is almost impossible and Canada will not emerge unscathed, Canadian officials and trade experts said. gained 0.9 percent as oil prices rose.

U.S. crude oil futures CLc1 settled 27 cents higher at $53.20 a barrel but some gains were pared amid concerns about rising supply from U.S. shale output. O/R

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 29.45 points, or 0.19 percent, at 15,786.03.

It was the sixth straight day of gains for the index, which has rallied nearly 37 percent from a three-year trough in January last year.

The utilities group, which tends to underperform as bond yields rise, fell 0.8 percent and the materials group, which includes precious and base metals miners and fertilizer companies, dipped 0.2 percent.

Teck Resources Ltd TECKb.TO fell nearly 2 percent to C$32.67 as copper pared some recent gains.

Copper prices CMCU3 declined 1.4 percent to $6,020.85 a tonne and gold futures GCc1 rose 0.4 percent to $1,229 an ounce. MET/L GOL/

Five of the index's 10 main groups ended higher.

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