TSX grinds higher as Bombardier soars on Airbus deal

TORONTO (Reuters) - Canada's main stock index inched higher on Tuesday, helped by a jump in Bombardier Inc BBDb.TO shares and higher financial stocks.

The Toronto Stock Exchange sign is seen in Toronto, Ontario, Canada July 6, 2017. REUTERS/Chris Helgren

Bombardier Inc ended up 15.7 percent at C$2.73 after soaring as much as 26.4 percent following a game-changing deal with Airbus SE AIR.PA.

The Canadian plane and train maker said it would sell a majority stake in its CSeries jetliner program to the European aircraft manufacturer, a move that helps secure the CSeries’ future and solves a number of issues for Bombardier, including its dispute with Boeing Co.

The overall industrials group rose 0.4 percent.

“It could be a win-win-win scenario. I think time will tell. ... It seems like a very creative way to perhaps get a win out of the scenario,” said Kevin Headland, senior investment strategist at Manulife Investments.

Financial stocks, which makes up about a third of the index's weight, gained 0.2 percent. Royal Bank of Canada RY.TO was the biggest driver of the index's gains and was up 0.5 percent at C$99.78. Thomson Reuters TRI.TO was another top gainer, rising 1.7 percent to C$60.19.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE edged up 14.2 points, or 0.09 percent, to finish at 15,816.90.

Six out of the index’s 10 main groups advanced.

“There’s no material end in sight for this slow grind higher. ... It should end the year in positive territory,” said Headland, adding that there did not seem to be too much negative momentum going forward.

Oil and gas companies rose 0.3 percent alongside slightly firmer crude prices, which advanced on Middle East tensions and data that showed a bigger-than-expected draw in inventories.

Capping the index’s gains was a 0.7 percent fall in mining and other resource stocks, as base and precious metal prices fell on a stronger U.S. dollar.

First Quantum Minerals Ltd FM.TO was the index's biggest drag, stumbling 4.1 percent to C$15.19, while Teck Resources TECKb.TO fell 2.3 percent to C$28.16. Iamgold Corp IMG.TO sank 5.2 percent to C$7.09.

Aphria Inc shares APH.TO tumbled 13.4 percent to C$6.86 after the operator of the Toronto Stock Exchange said that cannabis companies with U.S. interests would come under heightened scrutiny and could be delisted.

Canopy Growth Corp WEED.TO fell 4.7 percent to C$12.52, while the overall healthcare group gave back 1.6 percent.

Declining issues outnumbered advancing ones on the TSX by 132 to 108, for a 1.22-to-1 ratio on the downside.

Reporting by Solarina Ho; Editing by Paul Simao and Jonathan Oatis