* TSX ends up 0.99 percent at 13,052.48
* Highest close since Sept. 2008 (Updates to close, adds details, commentary)
By Claire Sibonney
TORONTO, Nov 8 (Reuters) - Toronto’s main stock index hit a a two-year peak on Monday, closing above 13,000 for the first time since Sept. 2008, as gold miners rallied sharply after the price of bullion powered to an all-time high.
Gold rose above $1,400 an ounce despite a firmer greenback as investors sought an inflation hedge from the U.S. Federal Reserve’s massive bond-buying program, sending recently lagging gold shares up almost 3 percent. [GOL/]
“Given the quantitative easing that we saw last week, given the (weak) outlook for the U.S. dollar, that should provide a boost to commodities. That should also provide a boost as such to commodity-related stocks,” said Philip Petursson, director of the portfolio advisory group at MFC Global Investment Management.
Oil, gold and base metals are typically priced in U.S. dollars and weakness in the greenback tends to drive their values higher.
Comments from World Bank president Robert Zoellick calling for leading economies to consider readopting a modified global gold standard to guide currency movements also provided underlying support for the precious metal and Canadian miners. [ID:nSGE6A702V]
“If you don’t want to look at the U.S. dollar as a reserve currency and if you don’t want to look at the yen as reserve currency -- given the economic outlook for these countries -- perhaps gold is a safer bet and I think that has somewhat been implied in the gold price over the last couple months,” Petursson added.
He noted that commodity plays including the energy sector, up 0.8 percent, and materials, up 2.5 percent, carried the day for Toronto’s main index -- which far outperformed its counterpart in New York. [.N]
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 127.37 points, or 0.99 percent, at 13,052.48, its highest closing level since Sept. 3, 2008.
Petursson said given the positive outlook for commodity prices, solid corporate profitability and reasonable stock valuations, by next year the TSX could see the all-time high above 15,000 it hit in June 2008.
Seven of the index’s 10 main sectors were stronger, including heavyweight financials, which added 0.3 percent, and energy, 0.8 percent higher.
John Kinsey, portfolio manager at Caldwell Securities, was optimistic about the sector.
“We are getting seasonal here for the energy,” he said. “Winter is coming and everyone seems to think La Nina is going to cause a very cold winter, and if we get a very cold winter that will be very good for the commodity.” (Editing by Jeffrey Hodgson)