Royal Bank of Canada Powers the TSX Higher

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

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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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Fool contributor Iain Butler owns shares in Barrick Gold.  The Motley Fool doesn’t own shares in any of the companies mentioned.   

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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