CANADA STOCKS-TSX hits 4-week high as miners rally

Tue Apr 5, 2011 5:23pm EDT
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 * TSX rises 52.18 points to 14,270.53
 * Highest level since March 7
 * Five index sectors rise
 (Adds details, quotes)
 By Claire Sibonney
 TORONTO, April 5 (Reuters) - Toronto's main stock index
rose for a sixth straight session on Tuesday and hit a
four-week peak as the gold price reached a record high and
copper shrugged off an interest rate hike in China, pushing up
mining shares.
 Shares of precious-metals miners surged 4.6 percent. [GOL/]
as the price of gold surpassed $1,450 an ounce on safe-haven
buying spurred by new highs for crude and corn prices, which
fanned inflation fears. A Portuguese credit downgrade drew
attention back to euro zone woes, which also helped push up the
gold price.
 Among the biggest gainers, Barrick Gold Corp ABX.TO shot
up 5.2 percent to C$52.36, and Goldcorp G.TO soared 5.8
percent to C$50.30.
 "It comes down to inflation. It's difficult for people to
deny that inflation is a headwind going forward and I think
it's starting in the emerging markets and we're seeing it come
out of some of the developed markets," said Philip Petursson,
managing director of the portfolio advisory group at Manulife
Asset Management.
 "I think it's just a matter of time before it shows ...
more of a headline number in North America. The rising gold, I
think, is reflective of that as well as reflective of the weak
fundamentals around the U.S. dollar."
 Base-metal miners rose 1.5 percent, pushing the index's
heavyweight materials sector up 2.9 percent as the price of
copper ended higher, even though China's giant appetite for the
metal has softened since the start of the year. [MET/L]
 Also on Tuesday, China's central bank raised interest rates
for the fourth time since October in a bid to cool stubborn
price pressures, a move that might curb its demand for metals.
 Diversified miner Teck Resources TCKb.TO added 2.3
percent to C$56.38, while First Quantum Minerals FM.TO rose
1.9 percent to C$140.
 Petursson noted that the strength in miners was also due to
expectations of more takeovers in the sector after Minmetals
Resources 1208.HK, China's biggest metals trading firm,
offered $6.5 billion on Monday to buy Equinox Minerals
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended up 52.18 points, or 0.37 percent, at 14,270.53,
its highest level since March 7. Five of the index's 10 main
sectors rose.
 Financials dropped 0.6 percent with Royal Bank of Canada
RY.TO falling 0.5 percent to C$60.30, and Toronto-Dominion
Bank TD.TO losing nearly 1 percent to C$85.29.
 The index's energy sector also declined, down 0.3 percent,
as U.S. crude oil futures settled lower ahead of weekly
inventory reports, although prices still held above $108 a
barrel on worries over unrest in Africa and the Middle East.
 "I have a little bit more difficulty trying to justify oil
at C$108 only on geopolitical risk. I think we are seeing it
top out a bit and the oil producers will move in line with the
oil price," Petursson said.
 Suncor Energy SU.TO was down almost 1 percent at C$43.60,
and Canadian Oil Sands Trust COS.TO was off 1.1 percent at
 The main index has risen almost 3 percent over the last
five sessions, which could set the stage for a pullback.
 "Markets have had a really strong run," said Peter
Chandler, senior vice-president at Canaccord Wealth
 "For a variety of reasons, there may be some pause in
economic activity, or the growth of it, that may make the
market have to digest what it's done before it can think about
what it wants to do next." 
 He counted rising food and energy costs, the Chinese rate
hike, and slower auto production as some of the headwinds that
may slow consumer spending and business growth.
 U.S. data showed growth in the vast U.S. services sector
slowed last month and price pressures eased slightly, according
to the Institute for Supply Management, but overall activity
expanded for a 16th straight month. [ID:nN05119497]
 In individual company news, TMX Group X.TO was down 0.7
percent to C$39 as analysts assessed that Australia's veto of a
foreign bid for its main stock exchange will make it easier for
Canadian regulators to block the London Stock Exchange's
LSE.L takeover offer forTMX, owner of the Toronto Stock
Exchange and other Canadian markets. [ID:nN05190035]
 ($1=$0.96 Canadian)
 (Reporting by Claire Sibonney; editing by Peter Galloway)