CANADA STOCKS-Gold miners, Bernanke push TSX higher

Fri Aug 31, 2012 4:33pm EDT
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* TSX closes up 62.61 points, or 0.53 percent, at 11,949.26
    * Bullion price soars, gold miners follow suit
    * Bernanke speech keep stimulus hopes alive
    * Canadian index still lower over week; up in light August

    By Alastair Sharp
    TORONTO, Aug 31 (Reuters) - Canadian stocks ended the week
on a positive note, boosted by a speech from Federal Reserve
Chairman Ben Bernanke that kept stimulus hopes alive and as the
soaring price of bullion helped gold miners.
    Bernanke stopped short of giving a clear signal the U.S.
central bank would soon act but investors bet that his language
made another round of bond-buying, known as quantitative easing,
more likely. 
    "QE is arguably very good for risk assets like equities, but
also QE would have a not terribly indirect impact on
commodities," said Stephen Wood, chief investment strategist at
Russell Investments in New York.
    Bullion hit a five-month high after the speech, helping
Toronto-listed gold miners punch higher. 
    Major players Barrick Gold Corp and Goldcorp Inc
 each gained more than 3 percent, Yamana Gold Inc 
jumped 4.3 percent and a slew of juniors jumped even more.
    Oil and copper prices also rose, lending support to the
energy and materials companies that make up a large portion of
the Canadian exchange.
    Athabasca Oil Corp jumped 8.6 percent to C$13.58
after a newspaper reported Kuwait's state-controlled oil company
had agreed to invest $4 billion in a joint venture in the
northern Alberta oil sands. 
    The Toronto Stock Exchange's S&P/TSX composite index
 gained 62.61 points, or 0.53 percent, to close at
11,949.26. The index still notched a loss on the week but gained
2.44 percent over the course of August in very thin volumes.
    Telus slipped 2.5 percent as the telecom company
sought to block its largest investor from holding a shareholder
meeting over a share consolidation plan. 
    The index had initially plummeted into the red as Bernanke
did not explicitly point to imminent monetary easing, but
quickly changed course again as the message was digested.
    "Markets are very easily moved up and down," said Sal
Masionis, a stockbroker at Brant Securities in Toronto. "You've
really got to parse every little thing he says."
    In the speech at a meeting of central bankers in Jackson
Hole, Wyoming, Bernanke said progress in bringing down U.S.
unemployment was too slow and the Fed would act as needed to
strengthen the economic recovery.  
    "The speech comes across as a staunch defence of the
effectiveness of unconventional monetary policy," Paul Dales, a
senior economist at Capital Economics, wrote in a note.
    He said the Fed would likely announce a third round of asset
purchases at a mid-September meeting.
    Such a move is seen as a positive in Canada, which watches
its southern neighbor and main trading partner closely for signs
of economic recovery.
    "The U.S. continues to be the only safe haven in this
weakening global economy. The data keeps improving and showing
strong signals," said Barry Schwartz, vice president and
portfolio manager at Baskin Financial Services.
    With the Fed chairman's speech in the rear-view mirror, the
market will watch whether the European Central Bank announces a
clear plan to tackle the euro zone debt crisis at its policy
meeting next week.
    "Draghi's not at Jackson Hole," Russell's Wood said,
referring to ECB President Mario Draghi's absence from the
meeting of global central bankers. "If he's too busy creating
the skeleton, if not the structure, of a pan-European banking
union ... the markets would look at that as a significant step
    Friday's rise was led by gold miners and by Royal Bank of
Canada, which rose 0.9 percent after surprising
investors with a dividend increase and solid profit growth on
    Domestically, growth in the Canadian economy positively
surprised investors at an annualized 1.8 percent in the second
quarter as strong business investment overshadowed a small
fiscal drag, data released on Friday showed.