CANADA STOCKS-TSX halts 5-day skid, underpinned by China, Spain

Thu Sep 27, 2012 5:30pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* TSX closes up 105.99 points, or 0.87 percent, at 12,338.85
    * China's central bank injection helps sentiment
    * Investors bet that Spain will seek bailout
    * RIM shares fly after close on better-than-expected results

    By Solarina Ho
    TORONTO, Sept 27 (Reuters) - Canada's main stock index
jumped almost 1 percent on Thursday, breaking a five-day fall as
investors bought back in to heavyweight resource and banking
stocks after Spain displayed fiscal discipline and China's
central bank splashed cash. 
    Nine of the index's 10 main sectors moved higher, led by the
heavyweight materials, energy and financial sectors, which
together account for more than three-quarters of the Toronto
Stock Exchange's S&P/TSX composite index.
    The index finished up 105.99 points, or 0.87 percent, at
12,338.85, as stronger oil, gold and copper prices boosted
energy and mining firms.
    The materials group index, home to mining companies, jumped
1.87 percent. An index of energy stocks gained 1.21 percent,
while an index of financial stocks rose 0.79 percent. 
    Goldcorp Inc led the rally as the biggest index mover
and was up 2.55 percent to close at C$45.44. The miner was
followed by the Bank of Nova Scotia, which advanced
1.24 percent, to end at C$54.75, and Royal Bank of Canada
, which was up 0.93 percent at C$56.69.
    Gold and copper prices climbed higher on hopes of additional
monetary stimulus from China, while fresh austerity steps in
Spain renewed fears about the euro zone.  
    Spain announced a detailed timetable for economic reforms
and a tough 2013 budget based mostly on spending cuts seen by
many as an effort to pre-empt the likely conditions of an
international bailout.  
    "This is one small pebble in a very large pile of rocks, but
it is a glimmer of hope that some of the southern European
countries can take the necessary steps in order to start
reducing debt levels, or at a minimum, stop increasing debt,"
said Craig Fehr, Canadian market strategist at Edward Jones in
St. Louis.
    Equity markets got an early boost overnight after China's
central bank injected 365 billion yuan ($58 billion) into money
markets this week to prevent a short-term liquidity crunch at
the country's commercial banks. 
    "China is by far the biggest factor in determining commodity
prices. Any news perceived as being positive for the Chinese
economy tends to help commodity prices, and therefore the TSX,"
said Elvis Picardo, a strategist at Global Securities in
Vancouver, who has recommended clients buy lagging Canadian
commodity stocks for several months.
    The news from China offset data showing weak orders for
manufactured goods in the United States, which dimmed the global
recovery outlook. 
    Picardo warned that the TSX's rise could simply be a
reaction to a five-day sell-off, and that catalysts would be
scarce until North American jobs data at the end of next week
and the start of corporate earnings season soon after.
    Still, a Reuters poll published on Wednesday showed Canadian
shares are expected to make further gains this year and into the
middle of 2013, as recent stimulus from major central banks is
expected to lift lagging resource stocks. 
    Weighing on the index on Thursday, Enbridge Inc 
dipped 0.46 percent to C$38.69 after environmental groups sued
the government over the pipeline company's contentious Northern
Gateway pipeline. 
    Research In Motion Ltd shares, which ended up 1.16
percent to finish at C$6.96 on the TSX, jumped 20 percent in
after market trade on the Nasdaq after the company reported a
smaller-than-expected quarterly loss on