CANADA STOCKS-Fed move boosts TSX's commodity stocks

Thu Sep 13, 2012 2:08pm EDT
 
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* TSX up 0.89 percent at 12,341.23, fresh 4-month high
    * Investors cheer Fed decision, commodity stocks jump
    * Energy companies gain as Mideast tensions boost crude

    By Alastair Sharp
    TORONTO, Sept 13 (Reuters) - Canada's mining and energy
companies jumped on Thursday, boosting the key Toronto index to
a fresh four-month high, after the U.S. Federal Reserve said it
would buy more bonds until the jobs outlook rebounds for
Canada's biggest trading partner.
    The Fed said it will buy $40 billion of mortgage-related
debt per month as long as inflation remains contained, and
indicated interest rates would not be raised from current
rock-bottom lows until at least mid-2015. 
    "Some investors were definitely surprised with how
accommodative a lot of the statements were," said Youssef Zohny,
portfolio manager at Stenner Investment Partners, part of
Richardson GMP in Vancouver. "It was the open-ended language
that markets are responding to."
    Gold miners jumped sharply after the news, which boosted the
price of bullion, and energy stocks also advanced. 
    Goldcorp Inc jumped 4.2 percent to C$43.77 and
Barrick Gold Corp added 2.6 percent to C$39.76.
Diversified miner Teck Resources Ltd moved 2.8 percent
higher to C$31.47 and Suncor Energy was up 1.1 percent
at C$32.98.
    "Commodities are responding as they typically do when you
see further inflation in the economy," Zohny said.
    Previous stimulus programs encouraged investors to push
money into riskier asset classes, including commodities and
equities, lifting prices.
    At 1:36 p.m. (1736 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 108.61 points, or 0.89
percent, at 12,341.23, its highest since May 1. It had been
trading lower before the Fed announcement.
    "We could actually see - which would be a change from what
we've seen year to date - the TSX perhaps lead the S&P 500 and
outperform it over the near term on rising commodity prices,"
said Philip Petursson, director of the portfolio advisory group
at Manulife Asset Management.
    The broad U.S. index is up more than 14 percent so
far this year, while the TSX has advanced just 2.3 percent.
    Among individual companies, Transat A.T. Inc 
shares jumped almost 22 percent to C$4.50 after the travel
operator swung to a profit as cost-cutting bore fruit, and said
it expects margins to continue to improve.   
    Shares of medical isotope provider Nordion Inc 
pared some recent losses, gaining 3.5 percent to $C7.11 on news
it will reorganize its business into two distinct units and
appoint a private equity executive to its board. 
    The stock had slumped earlier this week as Nordion suspended
its dividend after an arbitration panel rejected its claim for
damages from its main supplier.
    Macdonald, Dettwiler and Associates shares fell 5.7
percent to C$50.74 after the surveillance and satellite company
said the U.S. Department of Justice was seeking more information
about its planned acquisition of Space Systems/Loral Inc.