Toronto's main stock index ended higher on Friday as strong oil prices boosted the energy sector and investors looked for safe bets in stable Canadian bank issues as markets wound down towards year-end. The index also benefited as investors pushed more money into equities after a spurt of recent data appeared to confirm a slightly better outlook for the US economy.
"We've still got some concerns, but at the same time it looks like things maybe aren't going to get any worse," said Fred Ketchen, director of equity trading at ScotiaMcLeod. "I think we're seeing that reflected cautiously here in our market today."
The Toronto Stock Index ended up 50.19 points, or 0.42 percent, at 11,926.67. Nine of its 10 main sectors ended higher, with information technology closing flat. Research In Motion closed down 0.91 percent at C$14.20 as the company faced a trademark challenge over the BBM shorthand name it uses for its popular instant-messaging service BlackBerry Messenger.
But the technology company barely registered against the index, which charged ahead on strong financial issues, which rose 0.41 percent. Leading that drive was Royal Bank Canada, the country's largest bank, which rose 0.75 percent to C$51.30. Bank of Nova Scotia was also higher, rising 0.81 percent to C$50.91.
The banking sector was helped as investors rushed to qualify for dividends announced in the fourth quarter, and analysts noted that banks, particularly Canadian banks, are viewed as a safer bet than commodity-based equities. Energy issues were also higher, rising 0.78 percent as oil prices rose for a fifth straight day on concerns about possible supply disruptions in Iran and Iraq and recent signs of a strengthening US economy.
Suncor Energy closed 1.31 percent higher at C$29.28, while Cenovus Energy ended up 1.66 percent at C$33.62. Train and plane maker Bombardier Inc also posted strong gains, closing up 3.76 percent at C$3.86 after it received a $648 million order to supply new electric railway carriages to Deutsche Bahn for service in the Frankfurt area.
That, along with a gain by engineering firm SNC-Lavalin Group, which ended up 1.96 percent at C$49.31, pushed the industrials issues 1.07 percent higher. While trade on the TSX was thin ahead of the four-day Christmas long weekend, signs of improvement in the US housing market boosted investor sentiment, outweighing tepid consumer spending growth south of the border.
On the domestic front, Canada's economy stalled in October after four consecutive month-on-month increases, a sign the country is feeling the effects of increasing global uncertainty. "When you look at our market overall, our market this year is not expressing a whole lot of optimism," said Ketchen, noting that the TSX index is 11.85 percent lower so far this year.
"But I think that, the way the things are going, it is going to have a significant change of opinion as we move forward into the new year," he added. "Canadian companies from a profit point of view, from a contract point of view, I think they're doing reasonably well."