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CANADA STOCKS-TSX breaks 5-day slump as pick-up in risk appetite boosts financials

Published 2017-09-11, 04:52 p/m
© Reuters.  CANADA STOCKS-TSX breaks 5-day slump as pick-up in risk appetite boosts financials
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* TSX closes up 54.98 points, or 0.37 percent, at 15,040.30

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

* Financials gain 0.7 percent

* Tahoe Resources soars 33.7 percent

By Fergal Smith

TORONTO, Sept 11 (Reuters) - Canada's main stock index, which had fallen for five straight days, rose on Monday after Hurricane Irma weakened and North Korea refrained from conducting a missile test, with financial shares and Tahoe Resources leading the rally.

Gains for the Toronto market came as the S&P 500 posted a record high close. caused less damage than expected in Florida, while geopolitical tensions eased after North Korea did not test-fire missiles over the weekend, which some had feared.

"There is a clear risk-on tilt to the market today," said Ian Scott, equity analyst at Manulife Asset Management.

The financials group rose 0.7 percent as global bond yields, which had been weighed over recent weeks by safe-haven demand, rebounded.

Canada's 10-year yield, which had bucked the global trend last week by climbing as the Bank of Canada raised interest rates, touched its highest intraday since July 31 at 2.042 percent.

Higher bond yields reduce the value of insurance companies' liabilities and increase net interest margins of banks.

Manulife Financial Corp MFC.TO rose 1.3 percent to C$23.94, while Royal Bank of Canada RY.TO , Canada's biggest bank by market capitalization, advanced 0.6 percent to C$91.06.

Gains for bank stocks were more moderate than those for life insurance companies due to worries that a slowdown in the housing market will hold back loan growth, Scott said.

Tahoe Resources THO.TO surged 33.7 percent to C$7.61 after a Guatemalan court reinstated the company's license at its Juan Bosco and El Escobal mines. Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 54.98 points, or 0.37 percent, at 15,040.30.

Energy shares rose 0.8 percent as oil prices climbed.

U.S. crude oil prices CLc1 settled 1.2 percent higher at $48.07 a barrel as U.S. refinery restarts and Saudi cut extension talks offset Hurricane Irma-related demand fears. two of the index's 10 main groups ended lower.

The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.9 percent.

Fertilizer producer Potash Corporation of Saskatchewan Inc POT.TO gained 2.8 percent to C$22.17. But lower gold prices weighed on mining shares.

Alamos Gold Inc AGI.TO tumbled 16.1 percent to C$8.60 after the company said it will buy smaller rival Richmont Mines in an all-stock deal valued at about C$905 million. Gold Corp ELD.TO slumped 6.0 percent to C$2.34 after the company said it was suspending its Greek mining investment, citing regulatory hurdles. futures GCc1 fell 1.4 percent to $1,327.30 an ounce. GOL/

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