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S&P/TSX composite index closed up 0.33% at 28,433 points

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Gain in index mainly driven by RBC, which surged over 5%

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High oil price also boosted index as energy shares jumped

By Nikhil Sharma and Promit Mukherjee

Aug 27 (Reuters) - The Toronto Stock Exchange zoomed

past its previous record on Wednesday with the main index

closing at a new peak as profits and commentary from the

country's biggest bank boosted investor sentiment and hopes

around the economy.

A good part of the gain was also contributed by high oil

prices, which spurred buying activity in oil and gas shares.

The S&P/TSX composite index closed up 0.33% to

28,433 points, led by the biggest-ever intraday share price jump

for Royal Bank of Canada ( RY ) since the pandemic.

RBC, Canada's largest publicly listed company by market

capitalization, beat profit estimates for the quarter ended July

31 and set aside a smaller portion of money for loan losses than

analysts had forecast, sending its shares up almost 7.5% from

the previous close in intraday trade.

It ended up 5.08% at $200.07 per share.

RBC's stellar earnings closely followed similar performances by

Canada's fourth- and fifth-biggest lenders Bank of Montreal ( BNKD )

and Bank of Nova Scotia ( BNS ) the previous day.

"It's one word - earnings. Earnings have been great, and I

think we overestimated how much impact the tariffs would have on

corporate North America," Barry Schwartz, chief investment

officer at Baskin Wealth Management, said of the new TSX record.

"The fact of the matter is the largest companies on the

Toronto Stock Exchange and the U.S. exchanges are not really

impacted materially by tariffs. And that's the bottom line," he

said.

The TSX has been on a growth trajectory after a major slump in

April when U.S. President Donald Trump's tariff threats filled

investors with uncertainty around the future of the Canadian

economy. Since then, the composite index has grown by almost 27%

as the worst-case scenario from tariffs abated.

The gains of the main index since April have been almost

entirely mirrored by the financial index, primarily a

proxy for the country's top lenders, and the energy index

composed of oil and gas companies.

The financial companies' index, with the biggest 32% weight

on the overall main index, ended up 1.1%. Oil and gas shares,

which have a weight of more than 16% and the second-biggest

share in the main index, also boosted the TSX after the energy

index closed up 1.51%.

Oil prices settled higher on Wednesday after data showed a

larger-than-expected drop in U.S. crude inventories and as

investors weighed the potential impact from new U.S. tariffs on

India.

However, some fund managers are not enthused by the upswing

in the Canadian market, as a failure of Prime Minister Mark

Carney's government to secure a trade deal with the U.S. has

added to the threat of tariffs and uncertainty.

"I think we're a long way away from nailing down a deal

that's going to be widely accepted as great," said Michael

Sprung, president of Sprung Investment Management.

He said while strong earnings are driving positive

sentiments and buying activity, the market is at risk of

overheating based on the current exuberance of investors.