Gold helps lift TSX as euro deal optimism fades
By Jon Cook
TORONTO (Reuters) - Canadian stocks closed stronger on Friday after touching a near two-month high, as gains in the safe-haven gold sector offset the broader drag from fading optimism about Europe's deal to solve its debt crisis.
Toronto stocks had rallied more than 2 percent on Thursday on the initial euphoria about a deal being reached. But a weaker sale of Italian bonds that followed showed investor confidence in the agreement was shaky. <MKTS/GLOB>
"They (Europe) kicked the can down the road. But it's a very short road and it looks like we're going to be revisiting a lot of the problems so gold stocks have been benefiting," said John Ing, president of Maison Placements Canada.
"Precious metals have been and remain the place to hide."
The materials sector and gold miners were the biggest drivers. With gold on track for its best weekly gain in two months, the Canadian gold mining sector rose 2.3 percent. <GOL/>
Barrick Gold ABX.TO led the sector and broader market higher, jumping 3.9 percent to C$50.50. Goldcorp Inc G.TO was also up 3.8 percent to C$49.68.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 54.07 points, or 0.4 percent, to 12,519.51. It touched a session high of 12,541.84, its strongest level since September 9.
Further eroding investor optimism, Fitch Ratings called the plan by European policymakers to force banks to take a 50 percent haircut on their holdings of Greek debt a default. Continued...