Canadian stocks rose for a second day, as bank shares advanced on better-than-estimated earnings and phone companies rallied on dimmed prospects of competition from United States-based Verizon Communications Incorporated.
Royal Bank of Canada and Toronto-Dominion Bank gained at least 1.3 per cent after raising their dividends and posting third-quarter earnings that beat analysts’ estimates.
Bloomberg News reported that Rogers Communications Incorporated surged by three per cent to lead phone stocks higher. Dundee Precious Metals Incorporated jumped by 12 per cent after suggesting it may expand a gold and silver mine in Armenia.
The Standard & Poor’s/TSX Composite Index rose by 100.46 points, or 0.8 per cent, to 12,707.68 at 1:55 p.m. in Toronto.
The index added 0.1 per cent y and has gained 1.8 per cent this month.
“Given that so many people own Canadian banks, it is good news and that will set the tone on the macro for Canadian equity markets,” the portfolio manager with ABC Funds in Toronto, Irwin Michael, said in a phone interview. His firm manages C$800m ($774m).
“With the higher US GDP, it gives us more comfort that the economy is slowly but surely improving.”
Investors are weighing data that showed the US economy grew by more than expected in the second quarter and that claims for unemployment benefits declined last week. The US is Canada’s biggest trading partner.
Nine of 10 industries in the S&P/TSX rose, with phone, bank and health-care stocks rising at least 1.4 per cent. Trading volume in the benchmark gauge was 4.9 per cent below the 30-day average at this time of day.
The S&P/TSX Commercial Bank Index jumped by 1.8 per cent to a record high, as all eight members increased. Royal Bank, TD Bank and Canadian Imperial Bank each reported third-quarter earnings that beat analysts’ estimates.
Royal Bank, Canada’s largest lender by assets, gained 1.3 per cent to C$65.35, the highest in a month. Toronto-Dominion, the second-biggest bank, climbed by 3.2 per cent to a record C$90.34. Canadian Imperial Bank of Commerce rose by 2.7 per cent to C$82.58.
Phone stocks rallied 2.5 per cent on speculation that a Verizon bid for Vodafone Group Plc’s stake in Verizon Wireless will reduce the U.S. carrier’s appetite for Canadian expansion. Vodafone confirmed it’s in talks to sell its stake, in a deal that may be worth $130bn, according to people familiar with the matter.