TORONTO: Canada's main stock index touched a two-month high on Tuesday, led by gains for heavyweight financial and energy stocks, while shares of lumber companies rallied after new US import duties on the product came out lower than some investors had expected.
The United States said it will impose preliminary anti-subsidy duties averaging 20 percent on imports of Canadian softwood lumber, escalating a long-running trade dispute between the two neighbors.
Shares in West Fraser Timber Co Ltd, which would pay the highest duty rate of the affected companies, rose 5.6 percent to C$59.50, while Canfor Corp stock gained 3.5 percent to C$18.82.
Other lumber stocks including Conifex Timber Inc, Western Forest Products Inc and Interfor Corp also gained.
RBC analysts said the rates imposed were at the low end of their 20-30 percent expectation.
"While we expect this initial determination will be a headwind for Canadian producers in the short-term, we expect the impact will be less significant in the medium-term (as final rates come in lower), and even less so in the long-term after a new Softwood Lumber Agreement is formed," they wrote in a note.
At 11:01 a.m. ET (1501 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 43.53 points, or 0.28 percent, at 15,755.99.
Eight of the index's 10 main groups were higher, with the materials sector down 2.8 percent as disappointing earnings from two major miners offset the lumber company gains.
Barrick Gold Corp, the world's largest gold miner, fell 9.3 percent to C$23.32, after reporting weaker-than-expected earnings and slashing its forecast for output and hiking costs at its gold mine in Argentina.
Teck Resources Ltd fell 5.6 percent to C$27.94 after North America's largest producer of steelmaking coal reported lower-than-expected profit due to higher costs, lower production and sales volumes.
The energy group climbed 1.1 percent, as oil prices slipped after recent sharp falls, with Canadian Natural Resources advanced 2.1 percent to C$45.21.
The financials group gained 0.9 percent, led by a 1.3 percent gain for the country's largest bank, Royal Bank of Canada, to C$97.33.
Metro Inc after the retailer met earnings expectations and upped its dividend.
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