TSX rallies on China growth, U.S. bank earnings
By Jon Cook
TORONTO (Reuters) - Canada's resource-heavy main stock index jumped on Friday, led by energy and mining shares, as China's reported economic growth that was not as bad as some had feared and U.S. bank earnings beat expectations.
Growth in China slowed for a sixth straight quarter to 7.6 percent, but growth was both better than some in the market feared while low enough to keep open the possibility that more action may be taken by policymakers.
Global stocks and commodity prices rallied on the news, though some analysts cautioned that trading remained light.
"Despite the fact that we have a very strong day, we have very poor volume," said Sid Mokhtari, market technician and director, institutional equity research, at CIBC World Markets.
On Friday, nearly all of Canada's 10 main sectors were higher. The powerful energy complex led the way, climbing 1.4 percent as U.S. crude prices rebounded. Gains were stemmed as China's implied oil demand for June was down 0.4 percent year-on-year. <O/R>
The biggest movers among oil and gas firms included Suncor Energy (SU.TO: Quote), up 1.9 percent at C$29.41, Cenovus Energy CVE.TO, which rose 2.2 percent to C$33.28, and Crescent Point Energy CPG.TO, up 3.9 percent at C$38.50.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished up 89.06 points, or 0.8 percent, at 11,514.53. Even so, the index was down 1.2 percent for the week.
"The optimism in the markets is linked to the rather perverse case that is being made that as the Chinese economy slows then inevitably the Chinese government will have to put together some sort of package that will miraculously re-accelerate growth," said Carlos Leitao, chief economist at Laurentian Bank Securities in Montreal. Continued...