CANADA STOCKS-TSX jumps 1 pct; ECB bond-buying boosts oil firms

Thu Sep 6, 2012 12:32pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* TSX up 125.15 points, or 1.04 percent, at 12,115.16
    * ECB bond-buying helps index hit highest level since Aug 24
    * Miners, oil and gas companies lead rise

    By Alastair Sharp
    TORONTO, Sept 6 (Reuters) - Canada's main stock index jumped
more than 1 percent on Thursday, buoyed by commodity stocks,
after the European Central Bank launched a potentially unlimited
bond-buying program in a bid to draw a line under the region's
debt crisis.
    Signs that European growth could get back on track provided
a fillip to Canada's deep lineup of mining and oil and gas
companies, which are acutely sensitive to global demand.
    ECB President Mario Draghi sought to back up a July pledge
to do whatever it takes to preserve the euro zone currency with
the bond-buying plan, which he said would address bond market
distortions and "unfounded" fears about the survival of the
    "They've really had to pull out the big bazooka, which is in
essence to say 'we stand by to buy unlimited quantities of
sovereign bonds of distressed countries'," said Gavin Graham,
president at Graham Investment Strategy in Toronto.
    At 12:25 a.m. (1625 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 130.30 points, or 1.1
percent, at 12,120.44, its highest level since Aug 24. All 10
major index sectors rose, led by the energy and materials
    "It's clearly a positive for this market - the Toronto
market is a risk-on market, a commodity-weighted market -
because we will not be able to get clarity on commodities if
Europe is mired in recession and political stalemate," said John
Stephenson, senior vice-president at First Asset Investment
Management Inc.
    Commodity prices were broadly higher, with oil and gold both
notching gains.  
    The oil price was also boosted by U.S. government data that
showed stockpiles fell more sharply than expected last week.
    Also boosting market sentiment was U.S. employment data that
showed private employers hired more workers than anticipated in
August and that fewer people filed new claims for U.S. jobless
    "The jobs numbers were a bit better than anticipated, so
there are signs of strengths," Graham said.
    Among oil and gas shares, Canadian Natural Resources
 jumped 4.5 percent to C$30.69 and Suncor Energy Inc
 gained 1.8 percent to C$31.91, accounting for the two
biggest positive influences on the index.
    Shawcor Ltd rose 19.7 percent to C$41.97 after
saying it was for sale. The energy services company is expected
to attract interest from both strategic buyers and private
equity players, given strong demand for its pipeline coating and
other specialty businesses, which have dominant market
    Major Drilling Group International Inc jumped 10.8
percent to C$10.12 after reporting record quarterly earnings and
saying that demand remains strong. 
    Encana Corp gained 2.2 percent to C$21.82 after the
natural gas producer said an internal investigation determined
it did not collude with Chesapeake Energy Corp to lower the
price of land acquisitions in Michigan two years ago.
    Base metals miner Inmet Mining Corp gained 3.4
percent to C$45.66. It said it plans to expand its footprint in
Panama with an offer to acquire Petaquilla Minerals Ltd 
for about C$112 million.