CANADA STOCKS-TSX gains as US data lifts oil, banks and hope

Mon Oct 5, 2009 5:23pm EDT
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 * TSX closes up 1.32 percent at 11,102.62
 * Goldman's U.S. bank upgrade also lifts Canadian lenders
 * U.S. services sector data spurs market optimism
 (Adds details and comments)
 By Ka Yan Ng
 TORONTO, Oct 5 (Reuters) - Toronto's main stock index
finished more than 1 percent higher on Monday as investors
returned to equities following a two-week slide, snapping up
shares of banks and oil and gas companies.
 Bank shares that were unloaded last week helped power a
broad rally on the Toronto index, mirroring strong gains in the
United States that were made after Goldman Sachs raised its
rating on large U.S. banks to "attractive" from "neutral".
 Royal Bank of Canada (RY.TO: Quote) led heavyweight gainers,
rising 1.8 percent to C$56.15. Shares of Bank of Nova Scotia
(BNS.TO: Quote) climbed 2.13 percent to C$47.08, while Bank of
Montreal (BMO.TO: Quote) shares rose 1.3 percent to C$52.50.
 Energy shares, led by EnCana (ECA.TO: Quote), were also among the
big gainers on Monday, buoyed by a price of oil that settled
above $70 a barrel. [O/R] EnCana rose 1.4 percent at C$60.45,
while Canadian Natural Resources (CNQ.TO: Quote) jumped 1.75 percent
to C$69.62.
 Some of the positive sentiment that boosted all 10 of the
index's main sectors stemmed from U.S. data that showed the
services sector, representing about 80 percent of the U.S.
economy, expanded for the first time since August 2008.
 "That's a big piece of the U.S. economy. Clearly the
financials will benefit on both sides of the border if the U.S.
economy is growing more strongly than people had thought. Most
stocks that would benefit from stronger economic growth have
moved higher today," said Kate Warne, Canadian market
strategist at Edward Jones in St. Louis, Missouri.
 "I think what we're seeing is people who had been worrying
for the last week or so that growth would be weaker are today
feeling a bit more confident that in fact the economy is
pulling out of recession."
 The S&P/TSX composite index .GSPTSE closed up 144.29
points, or 1.32 percent, at 11,102.62.
 It had a shaky start in the morning after shedding 4.3
percent and touching its lowest level in a month last week. The
lower prices opened the door to some buying by investors who
were optimistic that upcoming data and corporate news will
paint a more upbeat economic picture.
 "We've really been going down for a while and people are
looking ahead and thinking that October is not going to be the
bad or brutal month that we always seem to anticipate," said
Sal Masionis, stockbroker at Brant Securities.
 "Usually bottoms are made in October. We've been drifting
down for a while and now there is just a little bit of
enthusiasm for equities."
 Other active issues on Monday included Ivanhoe Mines
(IVN.TO: Quote) and Canadian Hydro Developers Inc KHD.TO.
 Ivanhoe shares hit a 23-month high and finished up 2.1
percent at C$13.91 after the miner said it is about to sign a
long-awaited investment deal for its $3 billion Oyu Tolgoi
copper and gold deposit in Mongolia. [ID:nPEK216609]
 Meanwhile, TransAlta Corp (TA.TO: Quote) said that green-power
producer Canadian Hydro has accepted a C$1.6 billion sweetened
acquisition offer, ending a three-month takeover battle.
 Canadian Hydro shares rose 4.4 percent to C$5.23, while
shares of TransAlta edged up 0.14 percent to C$21.15.
 (Editing by Peter Galloway)