TSX climbs as market braces for US jobs data

TORONTO: Canada's main stock index rose on Thursday, led by gains in the financial and energy sectors, but the US Independence Day holiday kept investor interest low and market focus was squarely on Friday's key US jobs report.

The market got some support from the European Central Bank's statement that it plans to keep interest rates at record lows for an extended period and could yet cut them further.

But investor attention was riveted by the US nonfarm payrolls data to be released on Friday. The report is expected to show employers kept up a steady pace of hiring in June, with the jobless rate probably dipping.

The report has gained significance as the market has started to use it as a gauge to see if the US Federal Reserve will scale back on its massive stimulus program.

"The jobs report can surprise to the upside," said Philip Petursson, managing director, portfolio advisory group, at Manulife Asset Management. "How much of a surprise will give an indication of whether or not the Fed moves quicker."

"It will show the US economy is continuing to improve, but is it going to be a blowout number that everyone should say, 'That's the Aha moment for the Fed to move on that.'? I don't think we'll see that."

The Toronto Stock Exchange's S&P/TSX composite index closed up 20.98 points, or 0.17 percent, at 12,166.66.

Only about 112 million shares changed hands, compared with an average daily volume of about 334 million shares in June, according to market operator TMX Group.

"People are very reluctant to take positions in the absence of the US market being open," said Gavin Graham, chief strategy officer at Integris Pension Management Corp.

Eight of the 10 main sectors on the index were higher.

Financials, the index's most heavily weighted sector, were up 0.2 percent. Royal Bank of Canada, the country's biggest lender, rose 0.5 percent to C$60.82.

The materials group, which includes mining stocks, also edged higher. In the group, Teck Resources Ltd added 1.5 percent to C$22.27, and Potash Corp rose 0.7 percent to C$40.40.

Energy shares climbed 0.3 percent. In the sector, Canadian Natural Resources Ltd rose 1.4 percent to C$31.42 and had the biggest positive influence on the index.