Financial stocks help Canadian market extend 19-month high

Canada's main stock market in Toronto improved on Wednesday's 19-month high as financial stocks continued to move up on Thursday.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite climbed 57.45 points, or 0.38 percent, to close the day at 15,295.20 points. Six of the ten sub-sectors finished the session in the positive.

The TSX Financials group, which represents the largest weight in the index was the biggest gainer on the day, rising 1.02 percent. The sector continues to build momentum after four of the top five banks in the country posted fourth quarter financials that beat market expectations.

On Thursday, all five banks saw gains of at least 0.82 percent, with no. 5 ranked Bank of Montreal topping the list with a 2.02 percent uplift to 95.02 Canadian dollars (72.03 U.S. dollars). Meanwhile, no.1 ranked Royal Bank of Canada advanced 1.25 percent to 89.43 Canadian dollars (67.79 U.S. dollars).

Also advancing within the group was Toronto-based Manulife Financial Corporation, which saw shares moved up 2.83 percent to 24.36 Canadian dollars (18.46 U.S. dollars). The insurance and financial services firm was the most traded stock during the day, with more than 7.6 million shares exchanged.

Other groups that saw increases were Consumer Discretionary (0.38 percent), Utilities (0.28 percent), Industrials (0.21 percent), Energy (0.10 percent), and Telecommunications (0.07 percent).

Industrials rose as Montreal-based Bombardier shares gained 1.05 percent to 1.92 Canadian dollars (1.46 U.S. dollars) after the plane and trains maker confirmed a purchase agreement with Philippine Airlines to sell as many as twelve of their Q400 aircraft. The base agreement which is valued at 165 million U.S. dollars for five planes could more than double to 401 million U.S. dollars if all of the purchase rights are exercised.

Energy bounced back with a modest gain as crude oil snapped a two-session losing streak after reaching a 16-month high last week due to Organization of the Petroleum Exporting Countries (OPEC) members agreeing to decrease supply of the commodity. A barrel of Brent delivered in February rose 87 cents to 53.90 U.S. dollars in London.

Shares of Calgary-based energy firms Encana Corporation and Baytex Energy Corp. rose 2.80 percent and 1.61 percent, respectively.

Groups on the losing side on Thursday were Health Care (1.41 percent), Information Technology (0.89 percent), Materials (0.15 percent), and Consumer Staples (0.08 percent).

Health care group's dip was large in part to Quebec-based ProMetic Life Sciences Ltd. shares slumping 8.17 percent to 1.91 Canadian dollars (1.45 U.S. dollars). Since announcing the results of their last clinical trial on Nov. 17, the firm has yet to release any new details since, prompting shares to slip a staggering 34.14 percent.

On the economic slate, Government-owned Canada Mortgage and Housing Corporation (CMHC) reported that housing starts in November fell 4.32 percent to 183,989 units, a second straight month of decline.

Regionally, the province of Ontario experienced a 31.91 percent month-to-month drop to 55,232 starts, while British Columbia surged 72.70 percent to 44,019.

Diana Petramala, Economist at TD Bank believes that the six-month average of 199,145 paints a better picture of the current climate and predicts that figure to drop in the next two years.

"Near-200k units is roughly consistent with household formation. Household growth is being supported by a wave of millennials exiting their parents' homes and by record levels of immigration," said Petramala in a report. "Nonetheless, the combination of soft employment gains, tighter mortgage insurance regulation and rising mortgage interest rates are likely to bite into that demand in the New Year. Overall, we expect starts to edge down to 180k by the end of 2017 and 175k by the end of 2018."

The Canadian dollar moved up 0.0025 to 0.7580 U.S. dollars. Endite