TSX climbs to 3-week high as financial stocks rise

FILE PHOTO – A Toronto Stock Exchange sign adorns a door of the Exchange Tower building in Toronto, Ontario, Canada January 23, 2019. REUTERS/Chris Helgren

TORONTO, Feb 8 (Reuters) – Canada’s main stock index hit its highest level in more than three weeks on Tuesday, as gains in financials and industrials stocks offset a decline in the energy group.

The Toronto Stock Exchange’s S&P/TSX Composite Index (.GSPTSE) ended up 141.68 points, or 0.7%, at 21,377.18, its highest closing level since Jan. 17.

Financial stocks, which make up about a third of the Toronto market, rose 1.2% on higher bond yields. Higher interest rates tend to increase the margins banks can earn on their loans.

Bank of Canada Governor Tiff Macklem is due to speak on Canadian business developments on Wednesday, which could offer clues to the outlook for interest rates.

Money markets expect Canada’s central bank to start raising rates in its next policy announcement on March 2 and raise borrowing costs a total of six times this year.

Industrials added 1.5%, while the materials group, which includes precious and base metal mining companies and fertilizer companies, ended up 2.0%, helped by higher prices gold.

“Markets held up reasonably well given that crude oil is a little off today,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

U.S. crude oil futures settled down 2.2% to $89.36 a barrel amid fears that the resumption of indirect talks between the U.S. and Iran could lead to a rise oil exports from the OPEC producer. Read more

The fall in oil weighed on energy stocks, which ended down 3.9%. It included a 6.4% drop in shares of Cenovus Energy Inc (CVE.TO) after the company reported a quarterly loss. Read more

Reporting by Fergal Smith; Additional reporting by Anisha Sircar in Bengaluru; Editing by Sandra Maler

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