(Bloomberg) -- Canadian stocks extended their rally to a fifth day, closing with the biggest weekly gain since March, energy shares continued to ride the rebound in oil and banks advanced on signs that inflation is picking up, making an interest rate hike more likely.
The S&P/TSX Composite Index gained 0.6 percent to 14,939.04 at 4 p.m. in Toronto. The gauge rose 2.4 percent for the week to reach its highest level since June 2015. Rallies among miners and energy producers have propelled the index to a 15 percent increase this year, making it the top performing developed equity market in the world, ahead of the U.K. and New Zealand.
Raw-materials producers rose 0.9 percent to their highest level this month, leading the index as 10 of the 11 sectors edged higher. The group was led by Turquoise Hill Resources Ltd. after announcing it expects to meet the “higher end” of its full-year target. The shares gained 3 percent to their highest level since August.
Energy producers, Canada’s second largest sector, gained 0.8 percent as Tourmaline Oil Corp. gained 6.4 percent to the highest in 18 months after purchasing $1 billion in Western Canadian energy assets from Royal Dutch Shell Plc. Enbridge Inc. jumped 1.2 percent.
Financials stocks, which account for a third of the S&P/TSX Composite Index, gained 0.5 percent, closing at a record high. The gains were led by TMX Group Ltd. and Toronto Dominion Bank, both of which hit all-time peaks. Toronto-Dominion reportedly teamed with TD Ameritrade Holding Corp. and made a joint, non-binding offer for St. Louis brokerage firm Scottrade earlier this month, according to people familiar with the situation.
Industrial stocks gained 0.7 percent, rebounding from earlier declines. The sector was led down by Bombardier Inc., which fell 1.1 percent after it announced plans to cut 7,500 jobs, more than 10 percent of its workforce, in the next two years. The maker of airplanes and trains is initiating a restructuring plan after taking on billions of dollars of debt to develop its marquee C Series jetliner.
Canada’s inflation rate quickened in September for the first time in five months. The consumer price index rose 1.3 percent in September from a year ago, led by higher gasoline prices. The Bank of Canada maintained the benchmark interest rate at 0.5 percent this week and reduced Canada’s growth profile in large part because of slower housing markets and a lower trajectory for exports.
Canadian stock valuations remain 17 percent higher than their U.S. peers, with the S&P/TSX carrying a price-earnings ratio of 23.7 compared with 20.1 for the the S&P 500 Index, according to data compiled by Bloomberg.