CANADA STOCKS-Barrick, miners push TSX to 3-month high

Thu Aug 16, 2012 2:23pm EDT
 
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* TSX up 115.31 pts, or 1 pct, at 12,020.75
    * Gains led by mining, energy shares
    * Barrick up 3.7 pct after it says in talks to sell Africa
unit
    * Merkel comments, China data boost stimulus hopes

    By Jon Cook
    TORONTO, Aug 16 (Reuters) - Canada's main stock index rose
above the 12,000 level for the first time since early May on
Thursday as mining shares rallied on fresh stimulus hopes and
after Barrick Gold said it is in talks to sell a
majority stake in its African unit.
    The Toronto Stock Exchange's S&P/TSX composite index
 touched 12,025.01 - its highest level since May 3. The
heavily weighted materials sector, which includes miners, led
the way, jumping 2.8 percent.
    "We've had a lot of bad news over the last few months and
the market has not fallen apart," said Irwin Michael, portfolio
manager at ABC Funds. "The bottom line is the market is feeling
better."
    Barrick was among the index's top gainers, climbing 3.7
percent to C$35.52, after news that the world's largest gold
miner is in talks to sell a majority stake in its African unit
to China National Gold Group. 
    Adding to the gold group's luster, prices for bullion
rebounded from two straight losing sessions after prominent
hedge fund managers, including John Paulson and George Soros,
raised their stakes in the No. 1 gold exchange-traded fund SPDR
Gold Trust in the second quarter. 
    "I think you're going to start seeing some of the momentum
in the seasonality come back in that space, but the macro
headwinds are concerning, they really are," said Arthur Salzer,
chief executive officer of Northland Wealth Management.
    Other top mining stocks included Goldcorp Inc, up 4.5
percent at C$37.86, and Potash Corp, which rose 1.7
percent to C$44.01.
    Commodities also rose after remarks from German Chancellor
Angela Merkel that were viewed as supportive of further stimulus
moves from the European Central Bank. On a visit with Canadian
Prime Minister Stephen Harper on Thursday, Merkel voiced support
for ECB President Mario Draghi's crisis-fighting strategy.
 
    "What happens in Europe will affect us in North America,"
said Michael. "The powers that be at various central banks have
to realize that no man is an island and we're going to have to
fix the problems at whatever cost it may be."
    Canada's energy subindex rose 0.9 percent, led by Canadian
Natural Resources, which gained 2.3 percent to C$31.51.
    Investors were also focused on expectations for economic
stimulus in China after Premier Wen Jiabao said on Wednesday the
country, the world's top consumer of refined copper, still faced
headwinds despite cooling inflation. 
    Those expectations got another boost after China's Commerce
Ministry said that the trade outlook for 2012 was
worsening. 
    Around 2 p.m. ET (1800 GMT), the TSX was up 115.31 points,
or 1 percent, at 12,020.75.
    Michael cautioned that the August upswing has been done on
significantly reduced summer volumes, but added the positive
trend was likely to continue for the rest of the month.
    "It should end August higher than where it is right now."