Resources rebound, lift TSX to near three-week high

Tue Jul 9, 2013 5:00pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index rose on Tuesday to its highest level in nearly three weeks as robust commodity prices lifted shares of energy and mining companies, overcoming a decline in Alimentation Couche-Tard (ATDb.TO: Quote).

A strong start to the U.S. earnings season, which kicked off with Alcoa's robust profit report on Monday, also boosted investor sentiment.

The gains were capped as Couche-Tard, the convenience store and gasoline station operator, fell 5.6 percent after its fourth-quarter results missed market expectations.

Resource stocks, which have played a major role in keeping the Toronto market in negative territory for the year, were the session highlight.

Oil prices climbed in choppy trade, while the price of gold hit a one-week high on demand for the physical commodity. <O/R> <GOL/>

"Clearly resources are rebounding off the bottom," said Irwin Michael, portfolio manager at ABC Funds.

Energy shares in particular are trading at very attractive valuations and haven't mirrored the recent rally in the price of oil, he said.

"There is a bit of a disconnect between the oil price and oil and gas public companies," added Michael, who is "overweight" on energy stocks.   Continued...

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