TSX rises as China hopes boost energy shares
By Alastair Sharp
TORONTO (Reuters) - Resurgent energy and mining stocks on Thursday helped Canada's benchmark equity index regain ground it lost a day earlier as soft Chinese economic data kept alive talk that central bankers may ease monetary policy to stimulate growth.
Shares in Canadian oil and gas companies were lifted as investors bet that slowing Chinese inflation would give the central bank of the world's second-largest economy space to further loosen policy.
The resource-heavy Toronto stock market pays close attention to the potential for policy change in China, said Stephen Wood, chief investment strategist at Russell Investments in New York.
"The slowdown in Europe, which is going to be with us for a good while, is probably less directly impactful on the commodity complex than what is going on in China, just because of the nature of their industrial makeup, export makeup and fabrication makeup," he said.
Shares in oil and gas company Canadian Natural Resources Ltd CNQ.TO gained 6.2 percent to C$31.39, playing the biggest role of any stock in leading the index higher. The company said it would cut spending but nudged its production outlook higher.
Independent oil producer Crescent Point Energy Corp (CPG.TO: Quote) also helped pull the benchmark index up with a 4.8 percent jump to C$42.34 after posting a 55 percent increase in profit and raising its production forecast for the year.
The market was also encouraged by optimism that other central bankers could move to stimulate growth.
A European Central Bank governing council member said on Thursday the bank should be ready to intervene decisively soon to bring down excessive borrowing costs for Spain and Italy, while Wall Street also expects action from the U.S. Federal Reserve. Continued...