TSX Rises On China Rate Cut, Posts Weekly Gain -- Canadian Commentary

(RTTNews) - Canadian stocks extended their rally Friday on hopes that global central banks would continue to stimulate economic growth.

China's central bank unexpectedly lowered interest rates and reserve ratio on Friday, in what could be the latest stimulus effort to underpin the economy that is adjusting itself to the 'new normal' of lower growth.

The latest reduction was the sixth since November last year.

The move comes a day after the European Central Bank hinted that further stimulus is coming in December. Policy makers in the U.S. and Canada are also hinting that rates will stay extraordinarily low for some time.

Markets in Europe extended gains for a second day Friday on expectations the European Central Bank (ECB) would expand its €1.1 trillion asset-purchase program as soon as December to tackle the threat of weak inflation.

Strong earnings from U.S. companies raised optimism on both sides of the border.

The S&P/TSX Composite Index rose 75.55 points to 13,953.66. The index was up 0.85 percent for the week.

However, energy stocks droppped 1 percent as nat gas prices fell to the lowest since 2012.

In news from the financial sector, Bank of Nova Scotia (BNS.TO) picked up 0.7 percent. The Globe and Mail reports that the company will close some regional offices and cut jobs.

Bank of Montreal (BMO.TO) added 0.8 percent. The company announced that it will relocate its Atlantic Canada headquarters and support services, its main BMO Bank of Montreal and BMO Nesbitt Burns branches, as well as BMO Private Banking, Commercial and Corporate Finance offices to the new Nova Centre.

Sun Life Financial (SLF.TO) added 1.3 percent, after it launched the Stop-Loss Benchmark nationwide.

Health cares stocks jumped 3.5 percent.

Gold stocks were up 2.7 percent.

Thomson Reuters (TRI.TO) lost 1.3 percent after it re-affirmed its full-year business outlook for 2015. For the third-quarter, adjusted earnings per share was $0.52, beating estimates.

On the economic front, data from Statistics Canada showed that consumer prices rose 1.0 percent on an annual basis in September, following 1.3 percent rise last month. This was also lower than the expected 1.1 percent growth.

Core consumer prices grew 2.1 percent on year, same as last month. Economists had expected an inflation rate of 2.2 percent.