REFILE-CANADA STOCKS-TSX rallies on hopes for business-friendly US government

ReutersJan 17, 2025 11:03 PM

Corrects byline

TSX ends up 0.9% at 25,067.92

For the week, the index adds 1.2%

Utilities rise 1.4% as bond yields fall

TD jumps on faster leadership transition

By Fergal Smith

Jan 17 (Reuters) - Canada's main stock index rose to an eight-day high on Friday, notching broad-based gains as investors bet that the incoming Trump administration in the U.S. would pursue policies that help boost corporate profits despite the threat of trade tariffs.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 221.72 points, or 0.9%, at 25,067.92, its highest closing level since Jan. 9. For the week, it was up 1.2%.

U.S. stocks also rallied as investors braced for a slew of policy changes, including tax cuts and looser regulation, under the incoming Trump administration.

"The economy is really strong, interest rates are declining, you've got a change in the political situation in the U.S. that's very business friendly," said Steve Palmer, founding partner and chief investment officer at AlphaNorth Asset Management.

"The same thing looks like it's going to occur in Canada."

Former Canadian finance minister Chrystia Freeland announced she would take part in the contest to replace Prime Minister Justin Trudeau as leader of the ruling Liberal Party.

Trudeau's replacement is unlikely to be in office long, given polls show the Liberals are set to be crushed by the official opposition Conservatives in the next federal election, which must take place no later than October.

"I'm bullish for the year and I think there is going to be a rotation into small cap," Palmer said. "Guys are going to be looking for stuff that hasn't performed as well and where there's opportunity to get in earlier."

All ten major sectors on the TSX ended higher, led by a 1.4% gain for utilities as Canadian bond yields fell.

Heavily weighted financials climbed 0.8%, with Toronto-Dominion Bank TD.TO adding 4.4% after the bank said CEO-designate Raymond Chun will take charge on Feb. 1, more than two months earlier than initially planned.

The materials group, which includes fertilizer companies and metal mining shares, rose 1.1% and energy ended 0.9% higher.

(Reporting by Fergal Smith in Toronto and Ragini Mathur in Bengaluru; Editing by Sahal Muhammed and Nia Williams)

((fergal.smith@thomsonreuters.com; +1 647 480 7446))

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