February 4, 2009 / 10:25 PM / 8 years ago

CANADA STOCKS-Commodity firms drive higher, ING brakes rise

4 Min Read

* Resource stocks higher as metals prices rise

* ING Canada falls 14.7 pct after Dutch parent sells stake (Adds details, quote)

By Jennifer Kwan

TORONTO, Feb 4 (Reuters) - Toronto's main stock index rose for a second consecutive day on Wednesday as mining shares were boosted by a rise in underlying commodity prices, but weakness in financials kept the gains in check.

The resource-laden index's materials sector led the gain with a 3.9 percent rise, boosted by stronger gold and base metals prices.

The energy group finished the day up 1.4 percent even though oil prices CLc1 settled down at $40.32 a barrel after a U.S. government report showed a larger than expected build in crude inventories. [ID:nSP363085]

Heavily weighted issues that helped the market higher included Potash Corp (POT.TO), up 4.7 percent at C$97.65, and Barrick Gold (ABX.TO), which climbed 3.7 percent to C$45.73. In the oil patch, Suncor Energy (SU.TO) rose 3.3 percent to C$24.30.

The general strength in energy shares despite a fall in oil could mean investors are optimistic oil may be finding a bottom after dropping from its July peak of above $147 a barrel, analysts said.

"Crude oil has been quite volatile in recent weeks and it seems to be finding some support at the $40 level," said Elvis Picardo, a strategist at Global Securities in Vancouver.

The big financial services group started the day in the red, crept into positive territory, and fell back to end down 1.3 percent.

The weakness in the sector helped to trim gains on the index, which rallied as much as 2 percent earlier in the day. Toronto-Dominion Bank (TD.TO) dropped 1.6 percent at C$38.74.

"There's an expectation of bad news ... any time the financials show any strength then the selling starts to come in," said David Cockfield, senior vice president and portfolio manager at Leon Frazer & Associates in Toronto.

The S&P/TSX composite index .GSPTSE closed up 64.46 points, or 0.75 percent, at 8,693.09, with seven of its 10 main groups were higher.

The financial sector wasn't helped by ING Canada IIC.TO, which was the market's top net loser, dropping 14.7 percent to C$28.82 after its former parent, ING Groep NV ING.AS of the Netherlands, said it was selling the last of its stake in the Canadian insurer.

The stock sold off sharply, partly because of market jitters over the deep price discount that ING Groep offered in its aggressive stock sale. [ID:N04300472]

Analysts said uncertainty over the fate of the ailing U.S. banking sector also weighed on the financial sector.

Bank of America Corp (BAC.N) shares declined for a fifth straight day on concern the government might nationalize the largest U.S. bank and wipe out shareholders. [ID:nN04309899]

"When the U.S. banks get a little shaky that sends tremors out here as well," said Picardo.

Consumer staples fell 1.6 percent, helped lower by Saputo Inc (SAP.TO) as the country's largest cheese maker reported lower quarterly results. [ID:nN04110716] Saputo fell 4.3 percent to finish at C$18.75.

The industrial sector finished 2.2 percent higher, boosted by Bombardier Inc (BBDb.TO), one of the most heavily-traded stocks, which rose 7.2 percent to C$3.72 as price declines earlier in the week attracted buyers, analysts said.

Among individual stocks, Nova Chemicals Corp NCX.TO, another heavily-traded stock, surged more than 41.3 percent to close at C$1.95 on Wednesday on reports that the raw plastics maker has secured $100 million to help it meet its financial obligations. The reports were denied. [ID:nN04307350]

The blue chip S&P/TSX 60 index .TSE60 closed 4.35 points higher, or 0.84 percent, at 524.57.

$1=$1.23 Canadian Reporting by Jennifer Kwan; Editing by Jeffrey Hodgson

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below