TSX rallies on ECB pledge, Barrick weighs

Thu Jul 26, 2012 5:47pm EDT
 
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By Jon Cook

TORONTO (Reuters) - Canadian stocks had their biggest single-day gain in more than three weeks on Thursday, led by financial and resource shares, as European Central Bank President Mario Draghi's pledge to protect the euro zone from collapse sparked a commodities rally.

Global stocks rallied after Draghi, speaking in London, said the ECB was ready, within its mandate, "to do whatever it takes to preserve the euro.

The spurt of confidence in the outlook for the global economy offset weak earnings from Barrick Gold (ABX.TO: Quote) -- the world's largest gold miner.

"That relieved tension somewhat and you saw a chain reaction," said Bob Gorman, chief portfolio strategist at TD Waterhouse. "As the euro rose, the U.S. dollar fell and in turn commodities rose."

The euro rallied to a two-week high against the dollar on Draghi's comments, encouraging investors to buy dollar-denominated commodities such as oil, gold and copper. <O/R> <GOL/> <MET/L>

Canada's powerhouse energy sector jumped 1.8 percent, as U.S. oil prices rose on the improved confidence in Europe and on a sharp drop in U.S. jobless claims, which fell to a near four-year low.

Energy gains were led by top oil producer Suncor Energy (SU.TO: Quote), which rose 3.2 percent to C$31.86 after reporting a 28 percent jump in second-quarter profit earlier this week. The company on Wednesday also said it would scale back an ambitious growth program that had troubled some shareholders.

TransCanada Corp (TRP.TO: Quote) climbed 1.4 percent to C$44.80, and Enbridge Inc shares ENB.TO rose 1.1 percent to C$42.05.   Continued...

 
A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch