By Fergal Smith
TORONTO (Reuters) - Canada's main stock index rose on Thursday to a three-week high, as hopes that central banks would not overtighten monetary policy and strong corporate results from some major domestic banks tempered fears of an economic slowdown.
The Toronto Stock Exchange's S&P/TSX composite index was up 148.43 points, or 0.7%, at 20,532.18, its highest closing level since May 6. It was the fifth straight day of gains for the index, its longest winning run since March.
Wall Street posted even sharper gains after a raft of solid retail earnings and easing concerns about overly aggressive interest rate hikes by the Federal Reserve put investors in a buying mood.
"A little bit of risk appetite has come back," said Elvis Picardo, a portfolio manager at Luft Financial, iA Private Wealth.
"The bank numbers were quite solid. ... Investors are comforted to see that they are still posting good numbers and they don't seem to be gearing up for anything like a recession."
Royal Bank of Canada and Toronto-Dominion Bank on Thursday reported second-quarter profits that beat estimates, as provisions for credit losses (PCLs) improve at most Canadian banks, while Canadian Imperial Bank of Commerce posted the lone miss on the earnings front as its PCLs rose.
Shares of Toronto-Dominion advanced 1.6%, helping to push the heavily weighted financial services sector 0.9% higher.
Consumer discretionary gained 1.8%, with Richelieu Hardware up 4.2% after brokerage CIBC upgraded the stock to "outperform."
Technology added 1.9%, helped by a gain of 5.2% for e-commerce giant Shopify Inc, and industrials were up 1.8%.
On the economic front, Canadian retail sales were unchanged in March from February as lower sales at motor vehicle and parts dealers offset gains in all other subsectors. A preliminary estimate showed sales climbing 0.8% in April.
(Reporting by Fergal Smith; additional reporting by Amal S in Bengaluru; editing by Jonathan Oatis)