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CANADA STOCKS-Energy shares boost TSX to record peak despite weak earnings

Published 2017-10-27, 05:22 p/m
© Reuters.  CANADA STOCKS-Energy shares boost TSX to record peak despite weak earnings
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* TSX hits new intraday, closing record levels

* TSX up 61.88 points, or 0.39 percent, at 15,953.51

* Four of TSX's 10 major sectors were higher (Recasts with record close; adds quote, updates prices)

Oct 27 (Reuters) - Canada's benchmark stock index closed at a record high on Friday as energy shares surged alongside oil prices and as investors bet the central bank will be less aggressive in raising interest rates than previously anticipated.

The Toronto stock market, which also set an intraday record high, has climbed sharply since early September as traders have also been buoyed by strong economic growth and the relative value of Canadian shares compared to the United States.

The energy sector .SPTTEN fueled Friday's gain, jumping 2.6 percent as oil prices were lifted by support among the world's top producers for extending a deal to cut output. U.S. crude CLc1 prices rose 2.4 percent to settle at $53.90 a barrel. O/R

Canadian Natural Resources Ltd CNQ.TO provided the biggest lift on the index, up 2.8 percent at C$43.39, while Encana Corp ECA.TO climbed 4.9 percent to C$14.43.

A more dovish tone from the Bank of Canada earlier this week has pushed rate hike expectations further into the future, potentially boding well for Canadian corporate earnings, said Bryden Teich, portfolio manager at Avenue Investment Management.

"It means the economy is given a longer runway to continue to grow," said Teich. "The longer the economy has to continue to grow and build momentum and they're on the sidelines, the better it is for the market."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 61.88 points, or 0.39 percent, at 15,953.51.

The index climbed as high as 15,963.60 during the session, topping the last intraday record set in February. It was the seventh consecutive week of gains for the Toronto stock market.

While the market may see a pullback from here, it could ultimately have more room to run, said Teich, who sees the index getting to 16,200 or 16,300 by year-end if corporate earnings are good and the economy continues to grow.

Dairy producer Saputo Inc SAP.TO jumped 5.7 percent to C$47.48 after it agreed to pay up to $490 million for Murray Goulburn Co-operative MGC.AX , making it Australia's top milk producer. market gains were capped by a batch of earnings that largely fell short of expectations.

Among them, Cameco Corp CCO.TO tumbled 6.3 percent to C$10.64 after the uranium producer posted a surprise third-quarter loss and cut its full-year production outlook. Inc CLS.TO shares slumped 9.7 percent to C$13.8 following guidance and results that missed expectations, while First Quantum Minerals Ltd FM.TO shed 1.9 percent to C$14.21 after it posted a quarterly loss.

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