Canadian shares stretched gains to a fifth session as banks rallied a day after the central bank cut borrowing rates. The benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) rose 0.4 percent to 14,713.12 at 12:36 p.m. in Toronto. Five shares advanced for every three issues that declined as seven out of ten share groups were in the positive territory.
Financials, the index's most heavily weighted sector, picked up 0.9 percent. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, gained 1.2 percent to 78.16. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, jumped 1.2 percent to C$53.34.
The threat of a contracting economy prompted Bank of Canada Governor Stephen Poloz to cut his policy interest rate for the second time this year, to 0.5 percent from 0.75 percent yesterday.
The energy sector, the main index's second most heavily weighted group, was little changed as oil, Canada’s largest export, rose.
Suncor Energy (TSE:SU), Canada's largest oil sands producer, gained 0.3 percent to C$35.27. Enbridge (TSE:ENB), Canada's largest pipeline company, advanced 1.7 percent to C$59.53.
Brent crude for August was up 85 cents at $57.90 a barrel. U.S. light crude, also known as West Texas Intermediate or WTI, was up 11 cents at $51.29.
The materials sub-index, which includes mining shares, tumbled 1 percent as gold slides to an eight-month low. Goldcorp (TSE:G), Canada’s largest gold miner by market value, slipped 0.9 percent to C$20.26. Barrick Gold (TSE:ABX), the second-largest, sank 3.9 percent to C$11.99.
Black Diamond Group (TSE:BDI) added 1.8 percent to $16.75. The Calgary company has agreed to sell its construction-services operation to Northern Frontier for C$9.8 million.
Spot gold had fallen 0.4 percent to $1,144.60 an ounce, while U.S. gold futures for August delivery were down $4.00 an ounce at $1,143.40.
Magna International (TSE:MG) fell 2.8 percent to $70.19. North America’s largest auto-parts supplier has agreed to buy European transmission maker Getrag for EUR1.75 billion.
Colabor Group (TSE:GCL) gained 7.8 percent to $1.28. The food distribution company said sales were up 5.6 percent to C$366.6 million for its fiscal second quarter, thanks in part to its purchase of Alimentation Marcotte last fall. Net earnings dropped to C$1 million, or C$0.04 per share, from C$1.6 million, or C$0.06 per share, a year earlier.
Absolute Software (TSE:ABT) fell 10.6 percent to $8.00. The Vancouver, British Columbia-based company plans to sell its mobility management and IT service management products operations, Absolute Manage and Absolute Service.
The junior S&P/TSX Venture Composite Index (CVE:OSPVX) surrendered 0.2 percent to 641.30 at 12:36 p.m. in Toronto.
Meanwhile, a report showed today that international investors sold more Canadian securities than they bought in May, as cross-border mergers and acquisitions drove the first net divestment of equities this year. Sales totaled C$5.45 billion ($4.21 billion), Statistics Canada said. That was led by C$5.66 billion of stocks, as mergers and acquisitions of Canadian companies resulted in shares changing hands.
In the U.S. market, shares climbed following a batch of upbeat earnings reports and as Greece’s Parliament passed austerity measures needed to secure a fresh bailout. The S&P 500 (INDEXSP:.INX) rose 0.7 percent to 2,122.51 at 11:47 a.m. in New York. The 30-company Dow Jones Industrial Average (INDEXDJX:.DJI) advanced 0.3 percent to 18,097.07, while the tech-heavy Nasdaq Composite (INDEXNASDAQ:.IXIC) added 1.1 percent to 5,154.58. Most followed shares included Netflix, Intel, Garmin, eBay, UnitedHealth, Radius Health, Citigroup, Goldman Sachs, Philip Morris, and Rio Tinto.