CANADA STOCKS-Telecoms shares lift TSX to three-month high

Tue Sep 3, 2013 5:24pm EDT
 
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* TSX rises 86.60 points, or 0.68 percent, to 12,740.50
    * Six of the 10 main index sectors advance
    * Telecoms stocks have biggest positive influence on index

    By John Tilak
    TORONTO, Sept 3 (Reuters) - Canada's main stock index hit
its highest level in three months on Tuesday after bullish data
signaled rising strength in the global economy and news of
Verizon Communications Inc's decision not enter the
Canadian market drove up telecoms shares.
    But gains were tethered by investor fears over greater
volatility in the Middle East after some top Republicans said
they supported U.S. President Barack Obama's push for limited
military action. 
    After outperforming the S&P 500 in August for the
first time this year, the resource-heavy Toronto market
benefited on Tuesday from higher commodity prices, which spurred
gains in shares of materials and energy companies. 
    Telecoms shares surged after Verizon's chief executive said
in an interview the U.S. company is not planning to enter the
Canadian wireless market. 
    "It's great for the telcos that they can continue their
monopolistic hold on the Canadian consumer, though probably not
so good for the consumer," said Diana Avigdor, portfolio manager
and head of trading at Barometer Capital Management. "Nothing
changes for the telcos."
    The country's three biggest wireless companies, which had
sold off earlier this year on fears of Verizon's entry,
rebounded to have the biggest positive influence on the index.
    Telecoms stocks soared 4.4 percent and posted the biggest
gain of any major sector by far. Telus Corp added 6.8
percent to C$34.50, Rogers Communications jumped 7.2
percent to C$44.59, and BCE Inc rose 3.9 percent to
C$44.86.
    Figures released for August showed demand picked up in the
U.S. manufacturing sector and that domestic demand helped
China's services sector grow.  
    Investors expect the U.S. data to encourage the U.S. Federal
Reserve to move closer to dialing back, or tapering, its
monetary stimulus program with market focus on the crucial U.S.
employment report for August, to be released on Friday. 
    "Good data is considered to be tapering-friendly," Avigdor
said. ""Good news on the economic front is bad news for
quantitative easing."
    "We have to come off the drugs and allow the economy to hold
its own," she added.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 86.60 points, or 0.68 percent, at 12,740.50,
after reaching 12,828.13, its highest since May 22. 
    Six of the 10 main sectors on the index were higher.
    The materials sector, which includes mining stocks, jumped
1.2 percent. In the group, Teck Resources Ltd was up
3.2 percent at C$27.38, and Barrick Gold Corp rose 2
percent to C$20.52.
    Boosted by a rise in the price of oil, shares of energy
companies climbed 0.8 percent. Canadian Natural Resources Ltd
 added 2.1 percent to C$32.81, and Suncor Energy Inc
 rose 1.9 percent to C$36.17.
    Financials, the index's most heavily weighted sector, rose
0.5 percent. Toronto-Dominion Bank gained 0.8 percent to
C$90.32, and Bank of Montreal advanced 0.7 percent to
C$66.60.
     After two days of protests in Romania's capital, Bucharest,
against the government's support for Gabriel Resources Ltd's
 plan to open Europe's biggest open-cast gold mine,
shares of the company lost almost a fifth of their value. They
were down 18.2 percent at C$1.39.