By Fergal Smith
TORONTO (Reuters) – Canada’s benchmark stock index climbed to its highest close in 18 months on Tuesday as Bank of Montreal led financial shares higher on a strong earnings report, adding momentum to a month-long sector rally sparked by higher bond yields.
Bank of Montreal rose 2.8 percent to C$92.06. The country’s fourth-largest lender reported quarterly earnings well ahead of market expectations, benefiting from strong performances at its capital markets and U.S. personal and commercial businesses.
“Banks and insurance companies have reported solid numbers and are riding the tailwind of a move higher in yields,” said Matt Skipp, president of SW8 Asset Management.
Bond yields have risen since early November, reducing the value of insurance companies’ liabilities and increase net interest margins of banks.
The overall financials group gained 0.7 percent, while the Toronto…