CANADA STOCKS-TSX rises, set for biggest weekly gain in 19 months

Fri Jul 12, 2013 11:20am EDT
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* TSX rises 16.93 points, or 0.14 percent, to 12,510.19
    * Six of 10 main index sectors rise
    * Gold-mining shares drop 1.5 percent on weaker bullion

    By John Tilak
    TORONTO, July 12 (Reuters) - Canada's main stock index rose
on Friday as gains in energy and financial stocks offset weaker
materials shares, with the U.S. Federal Reserve's support for
monetary stimulus putting the index on track to post its biggest
weekly gain in 19 months. 
     Investors also processed mixed U.S. earnings reports, with
more robust results from top banks overshadowing a profit
warning from UPS.
    Federal Reserve Chairman Ben Bernanke said on Wednesday that
the U.S. central bank must keep a stimulative monetary policy in
place due to weak to inflation levels and a high unemployment
    That sparked a rally in global equity markets and caused a
1.5 percent jump in Toronto stocks on Thursday. 
    "We're really seeing some positive follow-through from the
response yesterday to Bernanke's comments," said Michael Sprung,
president of Sprung Investment Management.
    "It's a ying-yang scenario," he added. "If they have to hold
interest rates down, it's signaling that the recovery is not
strong enough to be self-sufficient."
    "But investors are taking the view that as long as interest
rates are held down, the recovery can continue to gather
momentum,"  Sprung said.
    The Toronto Stock Exchange's S&P/TSX composite index
 was up 16.93 points, or 0.14 percent, at 12,510.19,
after reaching and 12,519.65, its highest since June 5.
    Six of the 10 main sectors on the index were higher.
    Energy shares were up slightly, helped by a rise in the
price of oil. 
    Financials, the index's most heavily weighted sector, gained
0.2 percent.
    Royal Bank of Canada, the country's biggest lender,
added 0.3 percent to C$61.80. 
    In company news, Bank of Nova Scotia withdrew its
application to acquire a nearly 20 percent stake in Bank of
Guangzhou after Chinese authorities decided against proceeding
with the C$719 million ($691.28 million) deal. Shares of
Scotiabank gained 0.4 percent to C$57.16. 
    But the materials group, which includes mining stocks, gave
back 1 percent. A lower bullion price took gold producers down
1.5 percent.
    Barrick Gold Corp fell 1.4 percent to C$15.63, and
Goldcorp was down 1.4 percent, at C$26.83. 
    "People are worried any further declines in commodity prices
could have an effect on those companies and industries," Sprung
    The valuations of material stocks are becoming more
appealing, he added. Investors need to "find the ones that have
the financial wherewithal to survive a prolonged period of low