Aug 25 (Reuters) - Canada's main stock index ended at a
record closing high on Wednesday as upbeat quarterly results
from Royal Bank lifted financials, although the surging energy
sector was flat for the first time in four days as oil prices
The Toronto Stock Exchange's S&P/TSX composite index
added 0.19% to close at 20,587.32 points, surpassing
the previous closing record set on Aug. 11. The index is up
17.9% this year.
Royal Bank of Canada (RBC) also hit an all-time high
after the lender comfortably beat analysts' expectations for
third-quarter profit, lifting the broader financial index
But bank and insurers stocks pulled back from their highs
after Canada's ruling Liberal Party said it would hike the
corporate tax rate for the two industries to 18% from 15% on all
earnings over C$1 billion ($793 million) if reelected on Sept.
"Based on a rough back of the envelope approach, the taxes
payable for the Big Six banks would increase around 16% in
aggregate. So it could definitely have an impact," said Maria
Khoury, senior vice president for North American financial
institutions' credit ratings at DBRS Morningstar.
However, including tax deductions and other considerations,
and depending on what types of income are subject to the higher
rate, the final figure would likely be less, she said.
Recouping losses from their biggest fall in more than a
month last week, Canadian equities are tracking their seventh
straight month of gains on global optimism about a steady
post-pandemic economic recovery.
"We've got a lot of sector rotation going on beneath the
surface (in Canada) and all the cyclical sectors like energy,
miners - which got hit a few weeks ago amid concerns of more
lockdowns - have rebounded in the last few days," said Gregory
Taylor, portfolio manager at Purpose Investments.
A Reuters poll found the stock index is now expected to rise
only marginally by the end of the year, but then extend its
record-setting rally in 2022.
Heavyweight technology stocks edged higher,
tracking a rise in their U.S. peers, which have shrugged off
signs of slowing pace of economic growth to scale record highs.
Energy stocks were flat after surging 6% in the
past three sessions on a bounce in oil prices.
* RBC, Canada's biggest bank by market value, rose 0.8%
after beating reporting stronger-than-expected earnings.
* National Bank of Canada fell 0.6% despite
reporting better-than-expected earnings with some investors not
impressed by the quality of the profit beat.
* Air Canada edged down 0.8%. Canada's top airline
said on Wednesday it would require all employees to get
vaccinated against COVID-19, as the fast-spreading Delta variant
drives an increase in infections.
* The largest percentage gainers on the TSX were Lithium
Americas and Canaccord Genuity, while Osisko
Mining Inc and Sandstorm Gold led the
(Reporting by Amal S in Bengaluru and Nichola Saminather;
Editing by Sriraj Kalluvila and Richard Pullin)