TORONTO (Reuters) - Toronto’s main stock index finished at its highest level in nearly a month on Monday as higher U.S. natural gas prices boosted energy shares and offset losses from materials after weak U.S. and Europe data heightened global growth fears.
Energy issues shrugged off lower oil prices, climbing 1.5 percent as U.S. natural gas production in February fell slightly from January’s record-high according to government data on Monday, stirring expectations that an over supplied gas market might finally tighten and help pull up historically low prices.
“That might explain the outperformance of the energy sector,” said Marc-Andre Robitaille, president and portfolio manager at Robitaille Asset Management.
Gains were led by Canadian Natural Resources (CNQ.TO), up 3 percent at C$34.32, Enbridge (ENB.TO), which rose 2.2 percent to C$41.39 and Encana Corp (ECA.TO), Canada’s largest gas producer, up 2.5 percent at C$20.69.
Robitaille said energy stocks were also likely helped by expectations of solid earnings from Canada’s top oil and gas producer Suncor Energy (SU.TO), which was due to report its first-quarter results after close on Monday. Suncor shares rose 3.1 percent to C$32.63.
“People are probably buying Suncor today either short covering before the numbers or in anticipation of better-than-expected numbers,” said Robitaille.
He added good earnings last week from competitors Imperial Oil (IMO.TO) and Cenovus (CVE.TO) have helped cheer shareholders after the energy sector has underperformed the broader index so far this year.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished up 54.94 points, or 0.45 percent, at 12,292.69, its highest close since April 3. It was its fourth straight positive session.
However, the TSX still finished down for the second consecutive month, falling 0.8 percent in April.
On Monday, seven of 10 main sectors in the index were higher. Heavily-weighted materials, down 0.25 percent, pared gains as commodities slumped after data showed Spain sank into recession and the U.S. economy showed signs of slowing. <MKTS/GLOB>
Goldcorp Inc (G.TO) was among the most influential decliners, sliding 1.4 percent to C$37.83 as bullion prices slipped after four straight sessions of gains. <GOL/>
Goldcorp’s shares were further pressured after Canada’s No. 2 gold miner said environmental permit approval for its El Morro copper-gold project was suspended by the Supreme Court of Chile.
Weak North American data also hurt risk sentiment. A key gauge of business activity in the U.S. Midwest slowed more than expected in April, falling to its lowest since November 2009, a report showed on Monday.
“The Chicago PMI was down quite a bit, and that might be spooking some people,” said Philip Petursson, part of the portfolio advisory group at Manulife Asset Management. “It means we’re expanding at a much slower pace.”
In Canada, data revealed the economy unexpectedly declined 0.2 percent in February from January, led by temporary closures in mining and other goods-producing industries.
“It’s not clear that we’re out of the woods and we’re going to have a long period of steady economic growth and steady market performance,” said Robitaille.
In individual company news, Research In Motion’s RIM.TO shares rose 2.5 percent to C$14.13 ahead of the start of the BlackBerry maker’s annual BlackBerry World event in Orlando, Florida this week. At the three-day event RIM will hand out a prototype BlackBerry 10 device for developers to test their software applications.
Editing by Bernard Orr