Barrick, miners push TSX to three-month high

Thu Aug 16, 2012 4:39pm EDT
 
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By Jon Cook

TORONTO (Reuters) - Canada's main stock index rose above the 12,000 level for the first time since early May on Thursday as mining shares rallied on fresh stimulus hopes and after Barrick Gold (ABX.TO: Quote) said it is in talks to sell a majority stake in its African unit.

The push above the psychological 12,000 barrier was significant, investors said.

"It's crucial for two reasons," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver. "It has been a resistance level in the past and it also coincides with the index's 200-day moving average."

"The fact that it's broken through 12,000 is promising, but we need to see if it's sustainable," he added.

Barrick was among the index's top gainers, climbing 3.9 percent to C$35.60, after the world's largest gold miner confirmed it is in talks to sell a majority stake in its African unit to China National Gold Group.

Adding to the gold group's luster, prices for bullion rebounded from two straight losing sessions after prominent hedge fund managers, including John Paulson and George Soros, raised their stakes in the No. 1 gold exchange-traded fund, SPDR Gold Trust, in the second quarter. <GOL/>

Other top mining stocks that gained included Goldcorp Inc (G.TO: Quote), up 4.7 percent at C$37.93, and Potash Corp (POT.TO: Quote), which rose 1.6 percent to C$43.99.

"We've had a lot of bad news over the last few months and the market has not fallen apart," said Irwin Michael, portfolio manager at ABC Funds. "The bottom line is the market is feeling better."   Continued...

 
A sign shows TSX information in Toronto September 15, 2008. REUTERS/Mark Blinch (CANADA)