September 16, 2010 / 9:22 PM / in 7 years

CANADA STOCKS-Gold rush carries TSX higher

 *TSX up 28.51 points at 12,173.35
 *Gold again hits record high
 *Five of index’s 10 main sectors higher
 *RIM shares jump on earnings  (Updates to close)
 By Claire Sibonney
 TORONTO, Sept 16 (Reuters) - Toronto’s main stock index eked out a modest gain on Thursday as gold prices swept to a record high and copper prices rose, and, after the bell, U.S. shares of Research In Motion RIM.TO RIMM.O jumped on better than expected quarterly results from the BlackBerry maker.
 RIM’s U.S. stock rose more than 6 percent after hours.
 In Toronto, gold miners were up 1.7 percent, with Barrick Gold (ABX.TO), the world’s No. 1 producer, rising 2 percent to C$47.12, and Goldcorp Inc (G.TO) gaining 0.8 percent to C$44.04 as spot gold jumped as high as $1,277.70 an ounce on safe-haven buying. [GOL/]
  Copper prices were also up, extending a phase of consolidation just beneath a recent four-month peak, pushing up the index’s base-metal miners by 1 percent. First Quantum Minerals (FM.TO) added 2.3 percent to C$65.69.
 “(The index) has benefited from flight to gold and the rally in copper futures today, so on a relative basis that’s helped insulate the TSX,” said Fergal Smith, managing market strategist at Action Economics.
 Smith said stock market gains on both sides of the border were undermined by profit-taking as investors awaited key U.S. inflation data for August on Friday.
 “If we see a soft inflation number from the U.S., that could be the trigger for additional quantitative easing steps from the Fed next week,” added Smith, which could in theory boost riskier assets.
 The U.S. Federal Reserve’s Federal Open Market Committee meets on Sept. 21 and could announce new stimulus measures, such as quantitative easing, to stave off economic slowdown.
 Quantitative easing effectively means printing money to buy assets such as longer-term government debt in a bid to drive down borrowing costs.
 The S&P/TSX composite index .GSPTSE unofficially closed up 28.51 points, or 0.23 percent, at 12,173.35, with five of its 10 main sectors higher.
 The index’s financial group fell 0.5 percent with Royal Bank of Canada (RY.TO) losing 0.3 percent to C$54.34, and Toronto-Dominion Bank (TD.TO) dropping 0.6 percent to C$75.72.
 Banks rallied earlier this week on a global agreement on new bank capitalization regulations. Regulators, aiming to prevent a repeat of the international credit crisis, agreed last weekend on rules to raise bank capital requirements. The deal paved the way for Canada’s financial watchdog to end a moratorium on bank dividend increases and major acquisitions. [ID:nLDE68BOJE]
 “We had nice pop in all the banking stocks on the feeling that dividend increases are imminent,” Barry Schwartz, vice president and portfolio manager at Baskin Financial Services, said. “Maybe some of that excitement is now in the market and people still have to focus on earnings for these banks. It’s still an uncertain economy.”
 The index’s powerhouse energy sector was down 0.3 percent percent, with oil prices sliding for a third day as U.S. Midwest supply anxieties eased further on news that a major Canadian pipeline carrying crude to the region would be back in service by Friday. [O/R]
 Also supporting the index was Potash Corp (POT.TO), up 0.9 percent at C$151.88. The Globe and Mail said on Thursday that Potash is trying to stitch together a consortium led by China to back a management buyout to trump BHP Billiton’s (BHP.AX) $38.6 billion hostile takeover offer. [ID:nSGE68F0BA]
 ($1=$1.03 Canadian)   (Additional reporting by Jennifer Kwan; editing by Peter Galloway)                                        

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