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TSX Ends On Buoyant Note On Strong Earnings, Trade Talks Hopes

The Canadian stock market ended on a buoyant note on Friday, exhibiting strength for a second successive day, with upbeat corporate earnings reports, higher crude oil prices and optimism about U.S.-China trade negotiations prompted investors to pick up shares.

Energy, financial and industrial shares led the market up north. A few stocks from the healthcare space posted impressive gains. Consumer discretionary, information technology, materials and telecommunication shares ended mixed.

The benchmark S&P/TSX Composite Index ended up 142.26 points, or 0.91%, at 15,838.24, after rising to a high of 15,866.60.

Recording gains on three of the five sessions, the index added 1.31% in the week.

In economic news, data from Statistics Canada said foreign investors reduced their holdings of Canadian securities by $19.0 billion in December, after a record divestment in Canadian bonds. Meanwhile, Canadian investors reduced their holdings of foreign securities by $425 million, on sales of U.S. Treasury instruments.

A report from the Canadian Real Estate Association said national home sales were up 3.6% in the last two months (December 2018 and January 2019). Actual homesales were down by about 4% from a year ago.

The Capped Financial Index advanced 1.14%. Toronto-Dominion Bank (TD.TO) and Canadian Imperial Bank of Commerce (CM.TO) gained more than 1%. National Bank of Canada (NA.TO), Royal Bank of Canada (RY.TO), Bank of Nova Scotia (BNS.TO) and Bank of Montreal (BMO.TO) ended higher by 0.6 to 0.8%.

Sun Life Financial Inc. (SLF.TO) jumped 4.7%. Fairfax Financial Holdings (FFH.TO) ended nearly 4.5% up after announcing fiscal year 2018 net earnings of $376.0 million compared to fiscal year 2017 net earnings of $1,740.6 million.

The Capped Energy Index ended 3.21% up. Suncor Energy (SU.TO) gained about 3.75%, Canadian Natural Resources (CNQ.TO) surged up 4.1%, Encana Corporation (ECA.TO) jumped 5.2%, Cenovus Energy (CVE.TO) advanced by 3.3%, Imperial Oil (IMO.TO) gained 2.2%, Tourmaline Oil Corp. (TOU.TO) ended nearly 2% and ARC Resources (ARX.TO) gained 2.15%.

Baytex Energy (BTE.TO) and Crescent Point Energy (CPG.TO) gained 2.3% and 3%, respectively. Vermilion Energy (VET.TO) and Husky Energy (HSE.TO) also closed notably higher.

The Industrial Index gained 1.39%. Canadian National Railway (CNR.TO) and Canadian Pacific Railway (CP.TO) ended more than 1% up. Waste Connections (WCN.TO) ended 2.1% up.

Air Canada (AC.TO) gained 3.7% after announcing that it recorded adjusted net income of $54 million or $0.20 per diluted share in the fourth quarter of 2018, compared to adjusted net income of $60 million or $0.22 per diluted share in the fourth quarter of 2017.

Bombardier (BBD.B.TO) retreated and ended modestly lower after having rallied sharply in early trades. Toromont Industries (TIH.TO) jumped 10%. The company reported net earnings of $84.9 million for the quarter ended December 2018, up 44% from net earnings of $59.1 million in the corresponding quarter last year.

In the materials space, Franco Nevada Corporation (FNV.TO) ended nearly 2% up and Agnico Eagle Mines (AEM.TO) climbed 2.7%. Kinross Gold (K.TO) ended 6.25% up. Nutrien (NTR.TO) declined by about 1%.

Among the stocks in the healthcare space, Aphria Inc. (APHA.TO) gained 5.2% and Organic Green Dutchman Holdings (TGOD.TO) ended 1.35% up.

Canopy Growth Corporation (WEED.TO) advanced 2.5% after reporting net income attributable to shareholders of $67.6 million or 22 cents per basic share, up from $1.6 million or one cent per basic share a year earlier.

Village Farms International Inc. (VFF.TO) soared 21.5% after the company announced that its common shares have been approved for listing on the Nasdaq capital market.

U.S. stocks ended higher amid continued optimism about trade talks between the U.S. and China and on a report from the University of Michigan that showed a bigger than expected rebound in consumer sentiment in the month of February.

A statement from the White House said high level U.S.-China trade talks this week led to "progress between the two parties" but noted "much work remains."

The White House said the U.S. hopes to see additional progress as discussions at the ministerial and vice-ministerial levels continue in Washington next week.

Traders also reacted positively to news that lawmakers and President Donald Trump managed to avoid another government shutdown.

Trump still decided to declare a national emergency to obtain additional funds for his controversial border wall, although the move is not likely to have an immediate impact as it will face significant legal challenges.

European markets ended higher on trade talks hopes, while Asian markets settled mostly lower.

In commodities, West Texas Intermediate Crude oil futures for March ended up $1.18, or 2.2%, at $55.59 a barrel, a near 3-month high.

Gold futures for April ended up $8.20, or 0.6%, at $1,322.10 an ounce.

Silver futures for March settled at $15.743, gaining $0.215 for the session, while Copper futures for March ended up $0.0245, at $2.7985 per pound.

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