CANADA STOCKS-TSX at 5-month high as Fed helps commodity stocks

Thu Sep 13, 2012 4:36pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* TSX closes up 127.54 points, or 1.04 percent, at 12,360.16
    * Highest finish since April 2 as gold, oil prices surge
    * Investors cheer Fed decision, commodity stocks lead gains

    By Alastair Sharp
    TORONTO, Sept 13 (Reuters) - Canada's main stock index
closed at a five-month high on Thursday as mining and energy
companies jumped after the 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. 
    "It's more than what the market expected," said Ian
Nakamoto, director of research at MacDougall, MacDougall &
MacTier. "The commodities should do very well, we've already
seen a lift in gold."
    The price of bullion surged 2 percent after the Fed news,
lifting Canada's gold miners with it, while energy stocks also
advanced as crude moved higher for a sixth session.  
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 127.54 points, or 1.04 percent, at
12,360.16, its highest finish since April 2. 
    Goldcorp Inc jumped 4.7 percent to C$44 and Barrick
Gold Corp, the world's biggest gold miner, added 4.1
percent to C$40.32. Diversified miner Teck Resources Ltd
 moved 2.8 percent higher to C$31.44 and Suncor Energy
 was up 1.1 percent at C$33.18.
    "Commodities are responding as they typically do when you
see further inflation in the economy," said Youssef Zohny,
portfolio manager at Stenner Investment Partners, part of
Richardson GMP in Vancouver.
    Previous stimulus programs encouraged investors to push
money into riskier asset classes, including commodities and
equities, lifting prices.
    "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 20 percent to C$4.90 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 3.2 percent to $C7.09 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 5.9
percent to C$50.65 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.