Royal Bank of Canada Powers the TSX Higher

Gold, oil down, Canada’s market up. Huh?

Iain Butler

Chief Investment Advisor, Motley Fool Canada Fool since November 2012 Iain Butler, CFA, is Lead Advisor on Discovery Canada 2017. He is also the Chief Investment Advisor for Motley Fool Canada and is the lead advisor on its flagship Stock Advisor Canada product. Before joining the Fool, Iain was a “buy-side” analyst and through this experience is well-versed in the idiosyncratic ways of the Canadian market. His investing interests are centred on scouring the market for interesting businesses that trade at reasonable prices and offer an appealing risk/reward relationship. Since joining the Fool in 2012, Iain dedicates each day to spreading Foolishness throughout this great country!

Published May 21, 2013 5:03 pm EDT

Although the Royal Bank (TSX:RY) didn’t put in the biggest return in today’s Canadian market, because of its hefty weight, its shares were the biggest driver. Shares of Canada’s biggest bank jumped 2.7% on the day to help the S&P/TSX Composite (TSX:^GSPTSE) register a 129 point or 1.0% gain. This move higher by the Canadian market flew in the face of a decline in gold, silver, and oil prices. A rarity.

Even more rare was that two of today’s other big contributors, Canadian Natural Resources (TSX:CNQ) and Barrick Gold (TSX:ABX) also shrugged off the decline in their respective commodities as both stocks climbed by more than 4% on the day.

Contributing the biggest drag on today’s market was Valeant Pharmaceuticals (TSX:VRX) which was down 3.6%. Several weeks ago it was rumoured that Valeant was in pursuit of Actavis Inc. Actavis just announced an $8.5 billion deal to acquire Warner Chilcott, indicating a deal with Valeant is unlikely to be consummated. Those playing Valeant for its roll-up strategy were likely put off by this announcement.

Once again resource and financial stocks dictated the Canadian market’s performance. Because of their heavy-weights in the TSX, these sectors can be lethal for investors that think they are protected with an index fund or ETF linked to the S&P/TSX Composite Index.

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