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Banks help TSX edge higher for third straight gain

Reuters
A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

By Alastair Sharp

TORONTO (Reuters) - Financial stocks helped Canada's main stock index gain for a third straight session on Tuesday as investor optimism got a boost from Bank of Canada commentary and the U.S. Dow industrials closing at a record high.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) rose 12.90 points, or 0.09 percent, to 15,121.02. The market was closed on Monday, when two major U.S. indices hit record closing highs. Six of the index's 10 main groups fell.

Valeant Pharmaceuticals International Inc (Toronto:VRX.TO - News), an index heavyweight, led with a 3.3 percent rise to C$278.82. The overall healthcare group jumped 2.7 percent.

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Financial institutions were the next three most influential gainers, with Royal Bank of Canada (Toronto:RY.TO - News) up 1.7 percent at C$80.09 and Toronto-Dominion Bank adding 1.3 percent to C$56.09.

Insurer Manulife Financial Corp (Toronto:MFC.TO - News) rose 2.3 percent to C$23.13 and the overall group, which make up about a third of the index's weight, advanced 1.1 percent.

"The positive tone from (Bank of Canada Governor Stephen Poloz) has been supportive of banks," said Bryden Teich, associate portfolio manager at Avenue Investment Management.

Poloz said Canada's economy would recover from lower oil prices, with growth expected to resume this quarter.

"But at the same time today oil's down like 3.5 percent, so some of the large cap oils are dragging down or at least making the index flat," Teich said.

Suncor Energy Inc (Toronto:SU.TO - News) was off 1.2 percent at C$36.13, while Crescent Point Energy Corp (Toronto:CPG.TO - News) fell 2 percent to C$28.75. The overall energy group gave back 1.4 percent, as crude fell on evidence that production is outpacing demand and on a strengthening U.S. dollar.

Despite Tuesday's moves lower, Douglas Davis, chief executive officer at Davis-Rea, expressed some optimism for the sector, noting his firm has "done well with the recovery in energy and we don't think that's over."

Also tempering gains was a 1.1 percent loss by the materials group, home to mining and other resource companies. First Quantum Minerals Ltd (Toronto:FM.TO - News) tumbled 6.4 percent to C$17.45, while Cameco Corp (Toronto:CCO.TO - News) lost 4.8 percent to C$19.71. Barrick Gold fell 3.4 percent to C$15.26.

(Additional reporting by Solarina Ho; Editing by Marguerita Choy)