CANADA STOCKS-TSX has biggest one-day gain in 6 wks

Tue May 22, 2012 5:02pm EDT
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* TSX ends up 171.14 pts, or 1.5 pct, at 11,451.78
    * Biggest single-day gain since April 12
    * Materials, energy and financials lead gains
    * Talk of 'eurobond' boosts equity markets
    * U.S. data, China hopes help demand outlook

    By Jon Cook	
    TORONTO, May 22 (Reuters) - Canadian stocks enjoyed the
biggest single-day jump in nearly six weeks on Tuesday as
resource and financial shares rallied on global growth hopes.	
    Investors were cheered by strong U.S. data, reports China
plans to boost growth and speculation euro zone leaders may
agree to issue common bonds as a way of tackling the region's
debt crisis.	
    The trifecta of positive news was welcomed by Canada's
reeling main stock index, which has fallen more than 7 percent
in May on a cocktail of worsening euro zone conditions and weak
data from the United States and China.	
    On Tuesday, Canadian stocks significantly outperformed their
U.S counterparts, which were flat after a big gain on Monday
when Canadian markets were closed for the Victoria Day holiday.
    "The Canadian marketplace is the beta bet on a global
scale," said Pat McHugh, Canadian equity strategist at Manulife
Asset Management. "So if people are feeling good about the
global economy, Canada should outperform the U.S." 	
    Nearly all of Canada's 10 main sectors were higher, led by
heavyweight energy, up 2.5 percent, and materials, which climbed
1.7 percent.	
    The most influential resource gainers included Suncor Energy
, up 3.3 percent at C$28.30, Canadian Natural Resources
, which climbed 3.5 percent to C$31, Barrick Gold
, rising 1.5 percent to C$38.45, Kinross Gold, up
4.3 percent to C$8.17, Royal Gold, up 7.2 percent to
C$68.54, and Potash Corp, which rose 1.3 percent to
    Metals prices, most notably copper, rebounded on reports
that top metals consumer China will speed approval of
infrastructure investments to combat slowing growth and a
sluggish property sector.  	
    Also boosting sentiment was U.S. data that showed home
resales rose in April to their highest annual rate in nearly two
years and a drop in foreclosures pushed prices higher, hopeful
signs for the country's economic recovery. 	
    The Toronto Stock Exchange's S&P/TSX composite index
 finished up 171.14 points, or 1.5 percent, at
11,451.78. It was its biggest single-day gain since April 12.	
    The TSX hit a session high at 11,534.20. However, gains were
pared in the afternoon after Germany dismissed a French-led call
for euro zone governments to issue common bonds, cooling hopes a
day before a European Union summit that the meeting would
produce fresh measures to tackle the region's debt problems.
    "There are an awful lot of people who believe that the
'eurobond' is the answer," said John Kinsey, portfolio manager
at Caldwell Securities Ltd.	
    "Germany has opposed this because they're afraid it would be
a QE1 or QE2 kind of equivalent."	
    Canadian financial shares still finished up 1 percent, led
by the major banks. Toronto-Dominion Bank gained 1.2
percent to C$77.83, Royal Bank of Canada was up 0.9
percent at C$52.17 and Bank of Nova Scotia rose 1
percent to C$51.62.	
    Investors were looking ahead to Wednesday, when Bank of
Montreal is the first of Canada's six biggest banks to
report its second-quarter earnings results. 	
    "If the banks can pull something out of the hat then that
might get us going, but expectations are pretty low," said
    In other company news, shares of Niko Resources Ltd 
fell 1.4 percent to C$33.58 after the oil and gas producer said
it will relinquish its 15-percent interest in the D4 block at
the Mahanadi basin, off India's east coast.