Data lifts TSX to one-month high as golds surge

Wed May 8, 2013 5:10pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index jumped almost 1 percent on Wednesday, hitting a one-month high, after strong economic data in China and Germany buoyed hopes for a global economic recovery and boosted the shares of gold producers.

Gold shares jumped nearly 6 percent on the back of higher bullion prices, driven by a weaker dollar and robust physical demand. Miner Barrick Gold Corp (ABX.TO: Quote) rose more than 8 percent and rival Goldcorp Inc (G.TO: Quote) added more than 6 percent.

China's exports and imports grew more than expected in April, offering the possibility of a better outlook for the world's second-largest economy, while German industrial output unexpectedly jumped in March.

The resource-sensitive Toronto index's sharp reactions to developments in China, a big consumer of commodities from Canada, stem from its large exposure to materials and energy stocks.

The market's gains extended into a fifth straight session. The TSX has risen 1.2 percent on the year, recovering from a massive commodity-led selloff last month while still trailing growth at major indices like the S&P 500 .SPX.

"Equities are benefiting from a ‘Goldilocks environment'," said Stan Wong, vice president and portfolio manager at Macquarie Private Wealth.

"The economies are not too hot to stop the monetary easing policies of the central banks and not too cold to cause corporate earnings to slip into negative territory."

Earlier this week, major central banks indicated their support of growth-oriented policies.   Continued...

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