Canadian shares rose after Bank of Montreal and National Bank of Canada reported better-than-expected earnings and announced dividend increases.
The Standard & Poor’s/TSX Composite Index (TSE:OSPTX) rose 0.4 percent to 15,110.50 at 12:56 p.m. in Toronto. Three shares advanced for every two issues that declined as six out of the ten main share groups were in the positive territory.
Financials, the index's most heavily weighted sector, rose 0.6 percent. Bank of Montreal (TSE:BMO), Canada’s fourth-largest lender, was flat at C$77.90 after hiking its quarterly dividend 2 percent and reporting fiscal-second-quarter profit that topped analysts’ estimates.
National Bank of Canada (TSE:NA) rose 0.8 percent to C$49.74 as second-quarter earnings excluding items rose to C$1.15 a share from C$1.05, beating the C$1.12 a share analysts were expecting. The lender also raised its quarterly dividend to C$0.52 per share from C$0.50 per share.
Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, gained 1 percent to C$80.36. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, added 0.7 percent to C$56.09.
The materials sub-index, which includes mining shares, rose 0.4 percent as gold steadied off a two-week low. Eldorado Gold (TSE:ELD), the Canadian producer with mines in China and Greece, rose 0.3 percent to C$5.90 after saying results of a feasibility study on the 85 percent-owned Certej gold-silver project in Romania were positive.
Goldcorp (TSE:G), Canada’s largest gold miner by market value, gained 1 percent to C$21.93. Barrick Gold (TSE:ABX), the second-largest, gained 0.6 percent to C$14.64.
Spot gold was $1,186.66 an ounce at 10:18 a.m., little changed from late yesterday, while U.S. gold futures for June delivery were down 50 cents at $1,186.60. The metal has held within a $1,175-1,125 range for most of the last month.
The energy sector, the main index's second most heavily weighted group, fell 0.7 percent as oil, Canada’s largest export, dropped.
Crescent Point Energy (TSE:CPG) fell 4.2 percent to C$28.35 as the Canadian light oil producer said it would buy junior oil and gas producer Legacy Oil + Gas (TSE:LEG) for about C$563 million in stock. The deal is valued at about C$1.53 billion, including about C$967 million of debt. To fund the purchase, Crescent Point said it has agreed to sell at least C$600 million of common shares at C$28.50 each.
Suncor Energy (TSE:SU), Canada's largest oil sands producer, inched up 0.1 percent to C$36.24. Canadian Natural Resources Limited (TSE:CNQ), Canada’s second-largest energy producer, slid 0.1 percent to C$37.93.
The junior S&P/TSX Venture Composite Index (CVE:OSPVX) skidded 0.1 percent to 691.01 at 12:32 p.m. in Toronto.
In economic news, the Canadian dollar fell to the lowest in a month after the central bank left borrowing costs unchanged and said currency strength could affect the looser financial conditions it achieved with a rate cut earlier in the year. The loonie fell 0.3 percent to C$1.2476 at 12:07 p.m. in Toronto after trading at C$1.2484, the weakest level since April 15.
In the U.S. market, shares rose today as major benchmarks recovered ground one day after their biggest losses in weeks. The S&P 500 (INDEXSP:.INX) rose 0.7 percent to 2,119 at 12:23 a.m. in New York. The 30-company Dow Jones Industrial Average (INDEXDJX:.DJI) increased 0.6 percent to 18,154, while the tech-heavy Nasdaq Composite (INDEXNASDAQ:.IXIC) jumped 1 percent. Most followed shares included Tiffany, Hormel Foods, Michael Kors, DSW, Toll Brothers, Reynolds American, Workday, Brown Shoe, Movado, TiVo, and AbbVie.