Canada's main stock market in Toronto closed flat Thursday as the Canadian dollar continued its strength on data showing strong gross domestic product (GDP) growth in January.
The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index eased 9.62 points, or 0.07 percent, to close at 13, 494.36 points. Half of the TSX index's eight main sub-sectors were higher.
Toronto market stayed positive for the most part of the day, as energy issues firmed after crude oil prices turned higher but materials and health-care stocks dragged. The index remains on track for a second straight month of gains, something it hasn't accomplished since February 2015.
What's more, it could well notch a 5 percent gain in March, its biggest monthly upward move since October 2011. Energy group was up 0.94 percent, as Suncor Energy rose 1.46 percent to 36.17 Canadian dollars (27.85 U.S. dollars), and Pengrowth Energy Corporation surged 11.11 percent to 1.70 Canadian dollars.
Among financials, Toronto-Dominion Bank said that it expected losses from bad loans in the oil and gas sector to be manageable given its relatively small exposure to the energy sector. TD's shares fell 0.37 percent to 56.06 Canadian dollars. The shares of Cara Operations rose 9.38 percent to 29.15 Canadian dollars.
The owner of the Swiss Chalet casual dining chain and Harvey's burger outlets said it would buy St-Hubert BBQ, one of Quebec's largest casual dining chains, for 537 million Canadian dollars (413 million U.S. dollars).
The biggest drags on the index included mining company Silver Wheaton Corp., down 5.81 percent to 21.55 Canadian dollars, and Gran Tierra Energy Inc., off 5.81 percent to 3.24 Canadian dollars.
The shares of Valeant Pharmaceuticals International Inc fell 2. 99 percent to 34.05 Canadian dollars. The drug maker said it was asking its lenders for another month to file its annual report, seeking to reduce the risk of a default on its 30 billion Canadian dollar debt if it misses the current April 29 deadline.
On the economic ledger, Statistics Canada reported that January' s gross domestic product rose 0.6 percent, a fourth consecutive monthly increase. The agency attributes the rise to manufacturing, retail trade, and mining, quarrying, and oil and gas extraction.
The bigger-than-expected growth reduced the odds that the Bank of Canada will need to cut interest rates further this year, prompting economists to revisit their forecasts. "Today's release changes everything...well, at least it changes the tone of the debate on the Canadian near-term outlook," said BMO Capital Markets Chief Economist Doug Porter in a report to clients.
He added that in the last three months Canada has posted "rip-roaring" annualized growth above 5 percent. The Bank of Canada, which cut rates twice last year to help counter the effects of a slump in oil prices, is currently predicting first quarter growth of just 1 percent.
The January data suggests first-quarter growth could be markedly higher. The central bank's next rate announcement is on April 13, when it will also release an updated economic forecast. The Canadian dollar traded slightly lower at 0.7700 U.S. dollar, compared with Wednesday's closing rate of 0.7713 U.S. dollar.
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