CANADA STOCKS-TSX glides near 2-month high as major sectors rally

Tue May 21, 2013 5:35pm EDT
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* TSX rises 129.38 points, or 1.03 percent, to 12,742.43
    * Eight of the 10 main sectors advance
    * Gold shares rise 3.3 percent
    * RBC up 2.7 percent, ranks among market's most influential

    By John Tilak
    TORONTO, May 21 (Reuters) - Canada's main stock index jumped
more than 1 percent to hit nearly a two-month high on Tuesday,
fueled by gains in most major sectors and optimism following
positive economic data from Europe.
    British inflation fell twice as fast as expected last month,
giving incoming Bank of England Governor Mark Carney more leeway
for stimulus. Another report showed that Germany is on track for
a solid recovery due to a pickup in demand for its products from
    Investors also awaited minutes expected on Wednesday from
the U.S. Federal Reserve's most recent policy-making meeting to
look for clues about whether the central bank will continue its
ongoing stimulus program. 
    Stocks were supported by strength in resource groups,
reflecting gains in the prices of some commodities on Monday,
when the Canadian stock market was closed for the Victoria Day
    The resources-heavy Toronto market, up for the third
straight session, has climbed 2.5 percent for the year to play
catch-up with the S&P 500, which has recorded much
steeper gains.
    "The gap between the U.S. market and the Canadian market
will narrow as the year goes on," said Bob Gorman, chief
portfolio strategist at TD Waterhouse, in Toronto.
    Gorman expects the Canadian index to end the year about 6
percent higher.
    He sees a rebound in the resource sector because of low
expectations built into share prices.
    "If we get some modest pickup in economic growth as we get
into the second half of the year, that will allay fears of
further declines in commodity prices," he added.
    The materials and energy sectors have been hit hard this
year by weak commodity prices.
    The Toronto Stock Exchange's S&P/TSX composite index
 climbed 129.38 points, or 1.03 percent, to close at
12,742.43. Earlier, the index reached 12,806.54, its highest
point since March 22.
    Investors are starting to recognize the value in the TSX
even though "it has been the ugly duckling and the red-headed
stepchild all year," said Barry Schwartz, vice president and
portfolio manager at Baskin Financial Services, in Toronto.
    "We've had a number of names that are blowing higher," he
added. "You can make money in Canada if you avoid the
    Eight of the index's 10 main sectors were higher on Tuesday.
    The materials sector index, which includes mining stocks,
jumped 1.6 percent, helped by a 3.3 percent rise in shares of
gold producers. 
    Miner Barrick Gold Corp advanced 4.3 percent to
    An index of energy stocks climbed 1.3 percent.
    Financials, the Toronto index's most heavily weighted
sector, added almost 1.5 percent.
    Royal Bank of Canada shot up 2.7 percent to C$63.86,
and Bank of Nova Scotia rose 1.7 percent to C$59.74.
They were two of the market's most influential gainers; both are
among TD Waterhouse strategist Gorman's top picks.