TSX rises to two-week closing high, Scotiabank jumps

FILE PHOTO: The facade of the original Toronto Stock Exchange building is seen in Toronto

By Siddarth S and Divya Rajagopal

(Reuters) -Canada's main stock index rose to a two-week closing high on Tuesday, led by energy and technology stocks, while Bank of Nova Scotia got a boost from earnings release.

The Toronto Stock Exchange's S&P/TSX composite index provisionally ended up 267.25 points, or 1.32%, at 20,290.41, its highest close since Aug. 14.

The overall market sentiment boosted was boosted by gains on Wall Street, after a drop in monthly job openings cemented expectations of a pause in interest rate hikes by the U.S. Federal Reserve. Interest rate futures signaled an 87% chance the Fed will keep rates steady at its September meeting and a 54% chance it will keep rates on hold through November, according the CME Group's FedWatch tool.

That helped a rally in Canadian stocks, with rate-sensitive technology stocks rising over 2%, leading sectoral gains, while the energy sector climbed 1.7%, tracking crude prices. [O/R]

Heavily weighted financial stocks gained 1.2%, after declining in early trade.

Elvis Picardo, a senior portfolio manager with Luft Financial, iA Private Wealth, said TSX got support from the U.S. markets, after U.S. jobs data showed that job openings were the lowest in two years.

U.S. job openings fell for a third straight month in July as the labor market gradually cools, but remained tight.

"So it's a situation where, you know, economic bad news is good news for the markets," Picardo added.

"The expectation that the Fed will pause has pushed the markets higher. So we are getting into a data heavy week, so if we see that U.S. economy is indeed softening, it could be positive for markets."

Bank of Nova Scotia's shares rose 2.7% with investors encouraged by a 12.7% improvement in the lender's capital position and better expense management, even as the fourth-largest Canadian bank missed quarterly profit estimates.

Bank of Montreal's shares rebounded after early losses. The country's third-largest bank missed analysts' estimates for quarterly profit as it set aside more funds to cover bad loans. The stock ended up 0.2%.

CIBC, which is set to release earnings later this week, gained 1.4%.

Banks are facing a "systemic challenge" as the rapidly rising interest rates are pressuring consumers, resulting in banks making more extensive loan loss provisioning, said Philip Petursson, chief investment strategist at IG Wealth Management.

Among other economic data set for release this week include Canada's second-quarter GDP, U.S. personal consumption expenditures price index and non-farm payrolls.

Canada's second-quarter GDP report is due on Friday and will likely show a sharp slowdown in economic growth, a Reuters poll of economists showed.

(Reporting by Siddarth S in Bengaluru and Divya Rajagopal in Toronto, Editing by Tasim Zahid and Josie Kao)