Aug 28 (Reuters) - Canada's main stock index closed almost flat on Thursday as investors took profits on gains seen over the last few days, especially in banking stocks after two days of robust gains.
A higher trading in technology stocks and a late-hour reversal in energy shares helped to offset some losses from profit booking-led sales. The S&P/TSX composite index (.GSPTSE), edged slightly higher to close up 0.01% to 28,434..8 points, but still hovered around the record high level which was seen on Wednesday. "It's been a good run... so it looks like a little bit of profit taking," Martin Pelletier, senior portfolio manager at TriVest Wealth Counsel. The main index has given a return of 14.5% this year with over 4.5% coming in August alone after fears around U.S. tariffs receded, hopes of a trade deal increased and investors and analysts realized the worst-case scenario of the impact of tariffs on the Canadian economy is likely unfounded. The financials index (.SPTTFS), representing top lenders in the country, gave up some gains after two solid days of upswing and the energy index, composed of oil and gas stocks, stayed volatile.
The index, which accounts for almost a third of the weight in the composite index and is its biggest constituent, lost 0.22% at market close despite lenders TD Bank (TD.TO), and CIBC (CM.TO), topping analysts' expectations.
Both the lenders beat profit forecasts and posted lower than expected loan loss provisions. Shares of CIBC were up roughly 2%, while TD Bank lost 4.5%.
The Bank of Montreal (BMO.TO), the Bank of Nova Scotia (BNS.TO), and the Royal Bank of Canada (RY.TO), had posted similar stellar earnings this week, boosting investor hopes the local economy was getting better after an initial impact of tariffs.
Statistics Canada will release second quarter GDP number on Friday along with an advanced estimate for July growth and investors will be watching that closely to gauge the health of the economy in the coming months and prospects of a rate cut in Canada next month.
The energy sector (.SPTTEN), was up 0.4% as gains in crude oil price later in the day reversed losses seen for most of the day in oil and gas shares, while consumer discretionary shares (.GSPTTCD), led the sectoral losses with a 0.08% fall.
"The big question is, is this going to hold heading into September and October months which is seasonally a weaker period of time," said Pelletier, pointing to possible triggers for the TSX coming only from a trade deal between the U.S. and Canada.
South of the border, Nvidia's shares were down 0.82% as uncertainty over its China businesses clouded a better-than-expected revenue forecast for the next quarter.
Reporting by Nikhil Sharma; Editing by Shreya Biswas
