CANADA STOCKS-TSX gains as banks lead, eyeing 0.8 pct gain on week

Fri Jul 25, 2014 10:48am EDT

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    By Alastair Sharp
    TORONTO, July 25 (Reuters) - Canada's main stock index rose
on Friday and was still on track for a 0.8 percent gain in a
week of all-time highs, as financial stocks and some resource
names gained.
    The Toronto Stock Exchange's S&P/TSX composite index
 has climbed into virgin territory in recent days.
Investors are confident that economic fundamentals underpin the
rally, despite worries of a pullback. 
    "It is sustainable but in the short term we could very well
have a consolidation," Rick Hutcheon, president at RKH
Investments. "It's all going to depend very much on the earnings
as they come out over the next little while."
    Hutcheon said that equities are likely to remain more
popular than fixed income while interest rates are low and
looking to rise, and that energy and financial stocks are well
placed to gain from global recovery and higher rates.
    "There really aren't a whole lot of choices until the Fed
starts to raise rates, which as an aside appears to be still a
year-ish away," he said, referring to the U.S. Federal Reserve.
    Some of Canada's biggest banks led the way on Friday, with
Toronto-Dominion Bank up 1.4 percent to C$56.72, Royal
Bank of Canada gaining 0.7 percent to C$79.88, and Bank
of Nova Scotia also adding 0.7 percent, to C$73.83.
    Shares in TransForce Inc jumped 7.8 percent to
C$27.14 after the transportation and logistics company said late
on Thursday it planned to buy freight transport company Contrans
Group Inc for C$495 million.
    Among resource stocks, Potash Corp gained 1 percent
to C$39.30 on evidence that fertilizer demand was improving.
    The Toronto Stock Exchange's S&P/TSX composite index
 was up 44.73 points, or 0.29 percent, at 15,439.18 by
mid-morning for its fourth straight session hitting an intra-day
record high.
    Earlier in the week, geopolitical disturbances in Ukraine
and the Middle East forced a minor retreat, but RKH's Hutcheon
said those risks are unlikely to affect sentiment again without
a major escalation.
    Canada said on Thursday it would impose sanctions on a range
of Russian firms and banks to punish Moscow for what it said was
the illegal occupation of Crimea and "provocative military
activity" in eastern Ukraine. 

 (Editing by James Dalgleish)
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