(Updates with analyst comment, market open prices)
Aug 27 (Reuters) – Canada’s main stock index hit a fresh record high on Wednesday as investors cheered strong quarterly results from top domestic lenders, including Royal Bank of Canada.
At 09:48 a.m. ET (1348 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 0.23% at 28,403.82 points, edging past Friday’s intraday record climb.
RBC topped analysts’ profit estimates as it set aside smaller-than-expected loan loss provisions that included releases in its wealth management segment.
Its shares jumped 5.3%, helping lift the financial index , with 32% weighting on TSX, by 1.1% in early trading.
“A big part of our stock market is banks and financials, and so the market’s been reacting positively to that,” said Devin Cattelan, portfolio manager at Verecan Capital Management.
Peers Bank of Montreal and Bank of Nova Scotia have also benefited from smaller provisions on the back of easing trade tensions.
National Bank of Canada reported an increase in third-quarter profit, but its shares were down 4.3%.
Canadian banks have been expanding their wealth management segment due to stable fee-based revenue, diversifying from interest income tied to shifting rates and credit risks.
“As markets have grown, there would be growth that would happen in the underlying portfolios, which would help boost revenues and profits in those sectors,” Verecan’s Cattelan added.
Meanwhile, Dollarama dipped 3.6%. The discount store operator’s quarterly sales surpassed market estimates, driven by higher demand as shoppers looked for affordable household supplies and groceries.
Canada Goose’s controlling shareholder Bain Capital has received take-private bids at a valuation of about $1.4 billion, CNBC reported, citing people familiar with the matter.
Shares of the luxury goods maker climbed 13%.
On the flip side, TSX’s materials index lost 1.3% as it tracked lower gold prices, pressurised by a firm dollar and profit-taking. (Reporting by Nikhil Sharma in Bengaluru; Editing by Leroy Leo)
