TSX rallies on gold miners, Europe weighs
By Jon Cook
TORONTO (Reuters) - Canadian stocks rose on Monday, climbing with gold mining and defensive shares as investors remained nervous about the euro zone's lingering debt crisis, despite a weekend victory for pro-bailout parties in Greece.
Financial markets' relief at the Greek vote was offset by worries over its unresolved problems, the lack of a clear plan for the euro zone as a whole, and uncertainty ahead of meetings of the Federal Reserve and Group of 20 this week.
"A lot of bad news has been priced into equities over the last little while," said Philip Petursson, director of the portfolio advisory group at Manulife Asset Management. "There is much less downside and that is keeping the markets relatively buoyant today."
Nearly all of Canada's 10 main sectors were higher. Leading the way was the heavyweight materials group, which jumped 2.2 percent. Most of the gains came from gold miners, as bullion prices rose on hopes of further monetary easing by the U.S. Federal Reserve. <GOL/>
"That might be acting as a positive catalyst for the markets," said Petursson, but added that if the U.S. central bank were to act, it likely wouldn't be until later this summer.
Barrick Gold (ABX.TO: Quote), the world's top gold producer, was up 2.2 percent at C$41.18, while Goldcorp Inc (G.TO: Quote) climbed 1.3 percent to C$40.68. Mid-level miner Kinross Gold (K.TO: Quote) spiked nearly 4 percent to C$9.39.
Yamana Gold Inc (YRI.TO: Quote) rose 2.4 percent to C$16.75 after the gold miner said it would buy competitor Extorre Gold Mines Ltd XG.TO for C$412.9 million ($403.44 million) to build its portfolio of high-grade gold and silver deposits in Argentina. Yamana also raised its quarterly dividend by 18 percent. Extorre's shares surged 68 percent to C$4.27.
"You have these gold companies that historically haven't been big dividend payers, but now they're stepping up recognizing what investors want and providing that," said Petursson. Continued...