CANADA STOCKS-TSX posts biggest weekly gain since May

Fri Aug 10, 2012 5:21pm EDT
 
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* TSX ends up 32.76 pts, or 0.3 pct, at 11,890.89
    * Biggest weekly pct gain since late May
    * Mining, financial shares lead gains
    * Stimulus hopes support equities rally
    * Energy stocks slip on weak China data

    By Jon Cook
    TORONTO, Aug 10 (Reuters) - Canadian stocks capped their
best week in more than two months on Friday, led by mining and
financial shares, as expectations central banks would act to
shore up the world's economies offset soft domestic and Chinese
data.
    A weaker-than-expected reading of China's July exports
rattled investors and hurt oil and metals prices.
   
    But the troubling data was offset by hopes the Chinese
central bank could move soon to ease credit policy. 
    "We're living under some kind of a dome where all this bad
news just bounces right off us," said Barry Schwartz, vice
president and portfolio manager at Baskin Financial Services. 
    Eight of Canada's 10 main stock sectors were higher. The
heavily weighted materials group, which includes miners, pushed
the broader index higher, climbing 0.7 percent.
    Gold miners led the way as bullion rose in anticipation the
U.S. Federal Reserve and European Central Bank will take further
steps to boost their economies. 
    Barrick Gold was up 1.4 percent at C$34.30,
Goldcorp Inc gained 0.5 percent to C$37.15 and Kinross
Gold rose 2.5 percent to C$8.17.
    Potash Corp, the world's top fertilizer company,
climbed 1 percent to C$43.16 as corn futures set an all-time
high after the U.S. government slashed the size of the crop in
the world's top grain exporter. 
    Auto parts manufacturer Magna International jumped 5
percent to C$43.90 a day after reporting a sharp rise in profit
and announcing it would buy a controlling stake in an electric
car business. 
    Canadian financials edged up 0.2 percent, led by
Toronto-Dominion Bank, which rose 0.4 percent to
C$79.33.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 32.76 points, or 0.3 percent, at 11,890.89.
It was up 2 percent for the week, its biggest weekly percentage
gain since late May.
    However, trading was subdued and moves exaggerated due to
the holiday-shortened week in Canada and generally weaker summer
volumes, said John Kinsey, portfolio manager at Caldwell
Securities Ltd.
    "The volumes are about a third of what they normally are,"
he said. "It will likely be very quiet until after Labor Day."
    Trading has been relatively light in August ahead of what is
anticipated to be a busier September when traders return from
summer holidays and central banks may swing into action.
    "Equity markets are perhaps putting too much weight, too
much emphasis on salvation by the central banks," said Carlos
Leitao, chief economist at Laurentian Bank Securities in
Montreal.
    Energy stocks were the biggest drag on the index on Friday,
dropping 0.4 percent, as oil prices fell on the disappointing
China data. Weaker global oil demand forecasts from the
International Energy Agency also weighed.
    Major decliners included Canadian Natural Resources Ltd
, down 1.4 percent to C$30.95, Crescent Point Energy
, which fell 3.1 percent to C$41.04, and Suncor Energy
Inc, off 0.3 percent at C$31.78.
    Also weighing on risk sentiment was domestic data on Friday
that showed Canada's economy unexpectedly lost 30,400 jobs in
July, indicating tepid growth that will likely keep Canada's 
central bank on the sidelines for longer. 
    However, Schwartz noted that while most major economies have
slowed, they're still growing.
    "If you eat four bowls of ice cream and now you're only
eating three bowls of ice cream, you're still not losing
weight."