CANADA STOCKS-TSX bounces on commodities, euro zone hopes

Wed Jun 6, 2012 4:47pm EDT
 
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* TSX up 125.69 points at 11,663.40
    * Touches one-week high
    * 8 of 10 index subsectors higher
    * Oil, gold and copper push up resources shares

    By Jennifer Kwan	
    TORONTO, June 6 (Reuters) - Canada's benchmark stock index
rose to a one-week high on Wednesday as mining and energy shares
got a boost on signs major central banks might act to
resuscitate a slowing global economy.	
    The Toronto market followed global equities higher as a
Federal Reserve official sounded more inclined to consider
further help for the U.S. economy, while the European Central
Bank left rates unchanged and its president, Mario Draghi,
suggested near-term action was unlikely.	
    But some investors interpreted his comment that risks to the
economy had grown as a sign of possible future action by the
ECB. 	
    The heavily-weighted energy, financials and mining issues
pushed the index higher as the price of oil, gold and copper
edged higher.	
    Big names on the upside included Suncor Energy, up
3.3 percent at C$29.24, and Cenovus rose 5.2 percent to
C$32.47. Potash Corp was up 1.1 percent at C$40.11 and
Teck Resources rose 2.9 percent to C$32.31.	
    "There is some growing belief that we might get more action
from the U.S. Fed in conjunction with the fact that there are
some signs that possibly there might be a bit of progress coming
out of the situation to address the turmoil going on in Europe,"
said Craig Fehr, Canadian market strategist at Edward Jones in
St. Louis, Missouri. 	
    "It's partly a deep-breath rally to some extent. That things
aren't coming to an end like many might have thought last week."	
    The Toronto Stock Exchange's S&P/TSX composite index
 ended the day up 125.69 points, or 1.1 percent, at
11,633.40, with eight of its 10 subsectors higher. The index hit
a high of 11,686.99, its strongest since May 29.	
    Irwin Michael, portfolio manager at ABC Funds, said the
market had been oversold. 	
    "The markets will overshoot and undershoot. In this
particular incidence we think the market overshot on the
downside," he said.	
    "There's been so much negativity baked into the stock market
that it didn't take very much, say, if things go from bad to
less bad -- that degree of improvement will obviously affect
stock prices."	
    The market pared gains on weakness in gold miners, even as
the price of bullion ticked higher.	
    Barrick Gold , was the most influential
stock on the downside and skidded 5 percent to C$41.53. The
world's largest gold miner ousted Aaron Regent as chief
executive, saying it was frustrated that its stock has
languished since he took the helm three years ago while bullion
prices have surged. 	
    "That's not a reason for his firing that's justifiable,"
said Barry Schwartz, vice president and portfolio manager at
Baskin Financial Services.	
    "They have a right to be disappointed. We're all
disappointed. Anybody who has invested in any resource stock
should be disappointed. Over the past three years they've done
nothing for you.	
    Goldcorp fell 1.2 percent to C$41.30, while Kinross
Gold sank 2.1 percent to C$8.84.	
    Elsewhere, a subsidiary of Laurentian Bank of Canada 
said on Wednesday it will acquire AGF Trust Co from mutual fund
company AGF Management for C$415.5 million in a deal
that will expand its lending capacity. Laurentian shares were up
2.7 percent to C$42.35 and AGF stock was up 4.4 percent at
C$12.24.