CANADA STOCKS-TSX up as miners, oil get China boost

Thu Jun 7, 2012 10:50am EDT
 
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* TSX up 16.19 points at 11,649.59
    * Stocks rally on surprise China rate cut
    * Fed offers no hints of more stimulus, weighs on market
    * Barrick Gold key drag on index

    By Jennifer Kwan	
    TORONTO, June 7 (Reuters) - Toronto's main stock index pared
gains on Thursday after U.S. Federal Reserve Chairman Ben
Bernanke offered no hints that further stimulus was imminent,
cutting into a market rally fueled by a surprise interest rate
cut in China.	
    Diversified miner Teck Resources, up 3.4 percent
at C$33.40, led the way higher, with Cenovus, up 1.7
percent at C$33.01, close behind. Suncor Energy rose 0.4
percent to C$29.36 and First Quantum soared 4.7 percent
to C$19.00.	
    China delivered twin surprises on interest rates on
Thursday, cutting borrowing costs to combat faltering growth
while giving banks additional flexibility to set competitive
lending and deposit rates. 	
    Given weak U.S. data and troubles in Europe, there has been
rising speculation of more stimulus measures from global central
banks.	
    "It shows the Chinese authorities recognize that the
slowdown in China has gone far enough," said Gavin Graham,
president at Graham Investment Strategy.	
    "That means there's likely to be an increase in demand for
commodities and an increase in demand for the Chinese domestic
economy, which will help world trade and therefore
commodity-based, resource-based markets like Canada." 	
    But comments by U.S. Fed Chairman Ben Bernanke on Thursday
gave the market cause to briefly pause. Speaking in
congressional testimony, Bernanke said the U.S. central bank was
ready to shield the economy if financial troubles mount, but
offered few hints that further monetary stimulus was imminent.
 	
    At 10:20 a.m. (1420 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 16.19 points, or 0.14
percent, at 11,649.59, with the majority of index's key
subsectors were higher.	
    Yogawear retailer Lululemon Athletica Inc, down 9.5
percent at C$65.19, reported higher first-quarter profit on
Thursday, but inventories rose, and the company said growth in
same-store sales would slow. 	
    Also on the downside were gold mining stocks, led lower with
a 4.3-percent drop from Barrick Gold.	
    Barrick's surprising ouster of Chief Executive Aaron Regent
on Wednesday raised more questions than it answered for anxious
investors, who are left wondering why the world's top gold miner
would axe its CEO just a month after singing his praises.
 	
    Goldcorp sank 3.2 percent to C$39.96 and Yamana Gold
 was down 3.5 percent at C$15.96.	
    Fertilizer producer and retailer Agrium Inc, up 0.8
percent at C$81.10, more than doubled its semi-annual dividend o
n Thursday, underscoring its belief in its long-term
profitability.