Toronto index rises as railroads lift industrial stocks to record high

Canada's main index rose on Wednesday as railroad stocks jumped after US railroad Kansas City Southern said it would reevaluate a buyout offer from Canadian Pacific following a move by US regulators to halt a counterbid from Canadian National.

At 9:52 a.m. ET (1352 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 0.33% at 20,651.50.

The industrials index added 2.1%, as both Canadian Pacific Railway Ltd and Canadian National Railway Co jumped about 4% after a voting trust structure, which would have allowed the latter to proceed with a $29 billion acquisition of US peer Kansas City Southern , was rejected.

Canadian Pacific has offered $25 billion for the US railroad.

Canada's benchmark equity index has risen for seven straight months, tracking a jump in its US peers as investors bet on easy money to lift demand for risky assets despite signs of a wobbly economic rebound.

Canada's TSX heads for seventh month of gains

Data on Wednesday showed Canadian manufacturing activity grew in August at the fastest pace in four months as new orders climbed and firms scrambled to reduce the risk of running out of the stocks they need for production.

"It does feel like there's still going to be a lot of concerns about whether earnings growth starts to slow down and really just how the reopening works," said Gregory Taylor, portfolio manager at Purpose Investments.

"There's going to be a lot of volatility coming up in September and October (as) this was definitely one of the better Augusts we've had in a while and it's usually a weak month."

Heavyweight energy stocks stocks lagged the broader market on a slip in oil prices ahead of an OPEC+ meeting.

Highlights

Capstone Mining and Stelco Holdings were the biggest percentage decliners on the TSX.

The TSX posted seven new 52-week highs and no new low.

Across all Canadian issues there were 63 new 52-week highs and five new lows, with total volume of 56.99 million shares.