China plan boosts miners; TSX at fourth-month high
By Alastair Sharp
TORONTO (Reuters) - Canadian stocks surged to their highest since early May on Friday as grim U.S. jobs data fueled hopes for quick action from the Federal Reserve and China's multibillion-dollar spending plans jolted mining companies higher.
Bullion raced to a six-month high, helping major gold miners, as U.S. jobs growth slowed, setting the stage for the Federal Reserve to pump additional money into the economy of Canada's main trading partner as early as next week.
But base metal miners dwarfed those gains as Beijing signed off on $157 billion of projects to build highways, ports and airport runways, showing a proactive tilt as it looks to energize an economy mired in its worst slowdown in three years.
"It's amazing what a few hundred billion will do for you," said John Hughes, a senior mining analyst at Desjardins Securities.
Teck Resources Ltd (TCKb.TO: Quote), a diversified miner which makes much of its revenue from coal used in industrial production, jumped 9.2 percent to C$29.51, leading an 8 percent charge in the overall base metals group.
Prices for gold, oil, copper and other metals all jumped sharply, giving the cluster of Toronto-listed companies that sell these commodities a major boost.
"They're all up on the back of the view that China is not slowing, or more importantly, will not be slowing in the future," Hughes said, pointing out that the detailed spending plans were approved by a new cadre of Communist Party leaders.
Investors also cheered signs the Federal Reserve would follow the European Central Bank in embarking on fresh monetary easing to help kickstart growth, after payroll data showed fewer jobs were created than anticipated. Continued...