viewCanadian Market Wrap

Canadian shares rise on Liberal election victory

Construction, marijuana shares jump with heavyweight resource and financial stocks

Canadian shares rise on Liberal election victory
TSX jumps 0.5% after Justin Trudeau\\\'s Liberals won a majority government, ousting Stephen Harper’s Conservatives.

Canadian shares jumped on Tuesday as investors welcomed a decisive victory by Justin Trudeau’s Liberal party in the country’s election on Monday.

Liberal election victory, with construction firms and railways gaining with commodity producers and financials.

The benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) rose 0.6% to 13,833.59 at 12:36 p.m. in Toronto.

More than four shares advanced for every issue that declined as eight out of the ten main share groups were in positive territory.

The Liberals won a majority government, ousting Stephen Harper’s Conservatives after more than nine years of government.

The new government plans to run deficits and has also said it would keep corporate tax rates steady.

Construction companies SNC-Lavalin Group (TSE:SNC) added 1.7% to C$43.08, and Aecon Group (TSE:ARE) gained 4% to C$15.28.

During the campaign, Trudeau pledged to run a C$10bn annual budget deficit for three years to invest in infrastructure and help stimulate Canada's anemic economic growth.

Canadian marijuana stocks jumped as Trudeau had pledged to legalize the substance among his policy promises.

Canopy Growth (CVE:CGC) increased 5% to C$2.29 after climbing as much as 21%. Aphria (CVE:APH) rose 5.3%to C$1 and Mettrum Health (CVE:MT) gained 8.3% to C$1.99 after jumping 18%. The companies already produce marijuana for medical use, which is legal in Canada.

The materials sub-index, which includes mining shares, gained 2.2% as gold snapped a three-day losing streak.

Goldcorp (TSE:G), Canada’s largest gold miner by market value, surged 3.9% to C$20.03.
Barrick Gold (TSE:ABX), Canada’s second-largest gold miner, advanced 4.3% to C$10.25.

Spot gold was up 0.4% at $1,175.48 an ounce, while U.S. gold futures for December delivery were up $3.20 an ounce.

The energy sector, the main index's second most heavily weighted group, rose 1.4%  as oil was little changed.

Suncor Energy (TSE:SU), Canada's biggest energy company, rose 1.2% to C$36.81.
Canadian Natural Resources (TSE:CNQ), the country's largest heavy-oil producer, gained 3.3% to C$31.25.

Brent futures for December delivery fell  0.4%  to $48.44 a barrel. U.S. crude or West Texas Intermediate front futures contract was down 0.5% at $45.68 per barrel.

The financials group, which accounts for approximately 36% of the main measure, more than any other group, rose 0.7%. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, gained 0.9% to C$74.21. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, added 0.9% to C$40.96.

The industrials group, the fourth heaviest on the index, rose 0.6%. Canadian Pacific Railway (TSE:CP) gained 1.4% to C$192.80 as the company reported third-quarter profit that topped analysts’ estimates, driven by a weaker currency and expense reductions that included parking locomotives.

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