CANADA STOCKS-Energy shares lead TSX higher on China hope

Thu Aug 9, 2012 3:11pm EDT
 
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* Main index up 71.93 points, or 0.6 percent, at 11,852.97
    * Energy stocks lead rise as China policy eyed
    * U.S. and European central bank action also expected

    By Alastair Sharp
    TORONTO, Aug 9 (Reuters) - Resurgent energy and mining
stocks on Thursday helped Canada's benchmark equity index regain
ground it lost a day earlier as soft Chinese economic data kept
alive talk that central bankers may ease monetary policy to
stimulate growth.
    Shares in Canadian oil and gas companies were lifted as
investors bet that slowing Chinese inflation would give the
central bank of the world's second-largest economy space to
further loosen policy.
    Gold companies including Yamana Gold Inc and
Goldcorp Inc also rose as bullion prices edged higher.
    The resource-heavy Toronto stock market pays close attention
to the potential for policy change in China, said Stephen Wood,
chief investment strategist at Russell Investments in New York. 
    "The slowdown in Europe, which is going to be with us for a
good while, is probably less directly impactful on the commodity
complex than what is going on in China, just because of the
nature of their industrial makeup, export makeup and fabrication
makeup," he said.
    Shares in oil and gas company Canadian Natural Resources Ltd
 gained 5 percent to C$31.05, playing the biggest role
of any stock in leading the index higher. The company said it
would cut spending but nudged its production outlook higher.
 
    Independent oil producer Crescent Point Energy Corp 
also helped pull the benchmark index up with a 4.8 percent jump
to C$42.35 after posting a 55 percent jump in profit and raising
its production forecast for the year. 
    By 2:35 a.m. (1835 GMT) the Toronto Stock Exchange's S&P/TSX
composite index was up 77.34 points, or 0.7 percent,
at 11,858.38.
    On Wednesday falling mining, energy and financial stocks
broke a two-session rally that had pushed the index to a
one-month high.
    Conjecture about Chinese central bank action arose after
factory output growth in China slowed and consumer inflation
fell to a 30-month low. 
    "If there is one country that's going to move commodity
markets, it's going to be China if you can get demand back on
track," said Gareth Watson, vice president for investment
management and research at Richardson GMP.
    Watson said that action was also being anticipated from the
U.S. and European central banks.
    "The market is telling us they expect further steps to be
taken in the near future," he said. "Whether they'll be
effective is a completely different issue."
    The Bank of Canada remains one of the only major central
banks considering tightening policy, a view reiterated by
Governor Mark Carney in interviews published on Wednesday.
 
    Other stocks on the move included retailer Canadian Tire
Corp Ltd, which rose 4.2 percent after reporting a
higher profit. 
    Coffee chain Tim Hortons Inc fell 3.5 percent to
C$50.44 after reporting disappointing sales in Canada.