TORONTO (Reuters) - Canada’s main stock index inched higher on Wednesday, helped by evidence of improving corporate sentiment and by stimulus measures taken by another major central bank, but gains were limited by a drop in energy shares as crude oil prices fell.
After two days of declines, the index was held in positive territory by rises in bank and mining stocks, especially gold producers as bullion hovered near a 6-1/2 month high. <GOL/>
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed 13.45 points, or 0.11 percent, higher at 12,436.16.
“The financials, particularly the banks, had a pretty good day, reflecting broad-based sentiment associated with solid earnings,” said TD Waterhouse’s chief portfolio strategist, Bob Gorman, referring in particular to higher than expected earnings from widely held U.S. consumer staple stock General Mills and an increased dividend from Microsoft.
Investors also cheered the Bank of Japan’s move to ease monetary policy, which helped boost the price of copper and keep gold buoyant.
But the Japanese move didn’t aid energy shares.
Suncor Energy Inc (SU.TO), Canada’s largest integrated producer, fell 2.1 percent to C$32.83 after crude slipped for a third day to hit a six-week low on signs that Saudi Arabia would produce more to dampen prices and on data that showed U.S. stockpiles rose last week. <O/R>
Canadian Natural Resources Ltd (CNQ.TO), the country’s largest independent oil explorer and producer, closed down 2.2 percent at C$32.02.
The Bank of Japan, faced with weakening exports and a prolonged slowdown in Chinese growth, eased monetary policy by boosting its asset-buying program to try to spark growth in the world’s third largest economy.
The move, which followed soon after similar steps from the U.S. Federal Reserve and the European Central Bank, was also aimed at encouraging companies to invest cash to expand their businesses.
“Corporations need happy pills to get them to spend that money,” said Irwin Michael, portfolio manager at ABC Funds. “That’s what these authorities are trying to create.”
“On balance the market is quiet, people are still trying to get their bearings,” he added. “I still think there is an upward bias, but we have to be patient.”
Fertilizer company Potash Corp (POT.TO) had the biggest positive effect on the index, adding 2.4 percent to C$42.44, while Barrick Gold Corp (ABX.TO) gained 1.6 percent to C$41.65, and Royal Bank of Canada (RY.TO) moved 0.6 percent higher to C$56.72.
Centerra Gold Inc (CG.TO) jumped 16.7 percent to C$11.95 after the miner said it had received permits to restart operations at a project in Mongolia.
Colossus Minerals Inc CSI.TO gained 11.4 percent to C$5.95 after the junior miner said it had reached a $75 million financing deal with Sandstorm Gold Ltd SSL.V tied to future precious metal production, with the proceeds going to the development of its Serra Pelada mine in Brazil.
Shares in B2Gold Corp (BTO.TO) fell 11.9 percent to C$3.79 after the miner said it will buy CGA Mining Ltd CGA.TO for C$1.1 billion to gain access to its flagship gold mine in the Philippines.
Reporting by Alastair Sharp; Editing by Peter Galloway