Stocks Rebound Despite Rate Hike Chatter -- Canadian Commentary

(RTTNews) - Canadian stocks rose Wednesday, snapping a five-day losing streak despite signs the Bank of Canada is going to raise interest rates.

The BoC kept its benchmark rate of 1.25%, but strongly hinted that a July rate hike is forthcoming.

"Overall, developments since April further reinforce Governing Council's view that higher interest rates will be warranted to keep inflation near target," the central bank said. This is a reiteration of past statements, but the latest version omits a reference to "over time."

The TSX Composite Index rose 126 points to 16,048, helped by rebounding oil stocks and higher oil prices.

Yesterday, Canada said it has bought the Kinder Morgan Canada Ltd. Trans Mountain oil pipeline and its controversial expansion project for $4.5 billion.

Kinder Morgan gave up on the project after heavy resistance from British Columbia.

"The project became too risky for a commercial entity to go forward with it; that's what Kinder Morgan told us," Justin Trudeau told Bloomber. "We are going to ensure that it gets built so that we can get our resources to new markets."

Meanwhile, Bank of Montreal (BMO.TO) beat expectations by reporting earnings of C$1.25 billion in Q2 vs. C$1.25 billion in the same period last year.

National Bank of Canada (NA.TO) reported earnings came in at C$547 million, or C$1.44 per share. This compares with C$484 million, or C$1.28 per share, in last year's second quarter.

All of the big banks have reported strong earnings over the past week.

CP Rail (CP.TO) workers went on strike Tuesday. Almost all Teamsters members rejected the company's latest contract proposal.