FX.co ★ TSX Lifted by Strong Financial Sector Earnings

The S&P/TSX Composite Index experienced a modest increase of over 0.2%, surpassing the 28,350 level. This uptick was primarily driven by significant strong earnings reports from the Royal Bank of Canada (RBC), the largest component of the index, along with a broad reduction in credit provisions among major lenders. This shift in focus brought market attention back to the fundamentals of the banking sector and the resilience of near-term earnings. RBC emerged as the frontrunner with its stock price climbing more than 4.5%. The bank reported credit provisions of C$881 million, significantly lower than the LSEG consensus estimate of approximately C$1.07 billion, and announced adjusted earnings of C$3.84 per share. The improved performance in wealth management and capital markets propelled investor interest. Conversely, shares of the National Bank of Canada fell over 4% following its disappointing capital-markets revenue, which underperformed forecasts. This led to a reassessment of its market position, casting a shadow over the sector and somewhat dampening the rally. Despite negative performances from leading mining stocks, the substantial gain by RBC, due to its significant weight on the index, was sufficient to offset these losses, driving the TSX higher.