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Canadian stocks rise after Yellen rate hike remarks

Xinhua, May 28, 2016 Adjust font size:

Canada's main stock market in Toronto kept a strong momentum Friday as resources and financials stocks rose when investors waited for possible clues on the timing of U.S. interest rate hikes.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index added 56.03 point, or 0.40 percent, to close at 14,105.23 points. Seven of the TSX index's eight main sub-sectors were higher.

U.S. Federal Reserve Chair Janet Yellen said at Harvard University Friday that an interest rate hike would probably be appropriate in the next few months.

Meanwhile, U.S. economic growth in the first quarter was revised up to 0.8 percent, as opposed to the 0.5 percent pace reported last month. It was the weakest growth since the first quarter of 2015.

Oil prices continued to fall as the U.S. dollar jumped amid rate hike fears, which made the dollar-denominated oil less attractive for holders of other currencies.

The West Texas Intermediate for July delivery dipped 15 cents to settle at 49.33 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery decreased 27 cents to close at 49.32 dollars a barrel on the London ICE Futures Exchange.

TSX financials rose 0.58 percent as Toronto-Dominion Bank went up 0.37 percent to 57.67 Canadian dollars (44.23 U.S. dollars) and Brookfield Asset Management Inc. advanced 2.17 percent to 46.54 Canadian dollars.

Shares of Valeant Pharmaceuticals International rose 6.28 percent to 37.08 Canadian dollars. Reports said the drug maker received a joint takeover offer from Japan's Takeda Pharmaceutical and TPG Capital Management LP this spring that it rejected.

On national economic news, the Canadian federal government posted a deficit "broadly in line" with what was projected in its spring budget as personal and corporate income tax revenue fell in March.

According to its preliminary estimates, the Finance Department said Friday there was a 2 billion Canadian dollar deficit for the government's latest fiscal year.

However, that was before any year-end adjustments as well as a 3.7 billion Canadian dollar commitment to benefits for veterans.

For March, the last month of the fiscal year, the government posted a 9.4 billion Canadian dollar deficit compared with a deficit of 3 billion Canadian dollars in the same month last year.

The shortfall came as government revenue fell 5 billion Canadian dollars due to lower personal and corporate income taxes, offset in part by higher excise taxes and duties.

Program spending increased 1.3 billion Canadian dollars, while public debt charges gained 100 million Canadian dollars.

The Canadian dollar traded lower at 0.7670 U.S. dollar, compared with Thursday's closing rate of 0.7710 U.S. dollar. Endit