CANADA STOCKS-TSX rises on firm resources, banks

Tue Jan 18, 2011 10:48am EST
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   * TSX up 77.56 points at 13,517.67
 * Seven of 10 sectors stronger
 * BoC leaves rates steady at 1 percent
 (Updates with details, commentary)
 By Claire Sibonney
 TORONTO, Jan 18 (Reuters) - Toronto's main stock index
rallied on Tuesday, driven by solid commodity prices and
resource issues, as well as financials, after the Bank of
Canada held interest rates steady.
 All three heavyweights -- financials, energy and materials
-- were firmer.
 The top gainers were gold and base-metal miners, up 1.8
percent and 1.2 percent respectively, as the price of metals
drew strength from a weaker U.S. dollar. Barrick Gold Corp
ABX.TO advanced 1.5 percent to C$47.58 and Teck Resources
TCKb.TO climbed almost 2 percent to C$63.20. [GOL/] [MET/L]
 Financials added 0.2 percent, boosted by the outlook for
continued low interest rates after the central bank kept its
overnight target at 1 percent, as expected.
 "The Bank of Canada indicating that they aren't  going to
change interest rates for the time being is being taken as good
news," said Michael Sprung, president of Sprung & Co.
Investment Counsel. "The banks are happy with that, so that
should help their net interest margin a little bit here."
 Sprung said investors have been worried about what another
rate hike or bullish commentary from the central bank would do
to a high-flying Canadian dollar.
 "I think people were worried about what that would do in
terms of the pressure it would put on the dollar at a time when
manufacturing is finding it tougher to compete with the dollar
up where it is."
 Going into the announcement, the Canadian currency hit a
two-and-a-half year high. It softened slightly after the Bank
of Canada announcement, but remained above parity against the
greenback. [CAD/]
 Royal Bank of Canada RY.TO rose 0.4 percent to C$54.18
and Toronto-Dominion Bank TD.TO gained 0.3 percent to
C$76.36. TD owns a 46 percent stake in U.S. brokerage TD
Ameritrade Holding Corp AMTD.O, which reported a rise in
quarterly profit on Tuesday. [ID:nN16244192]
DundeeWealth DW.TO rose 1.5 percent to C$21.60 after its
board of directors approved the payment of a special cash
dividend of C$2 a share. As well, Bank of Nova Scotia BNS.TO,
down 0.1 percent at C$56.65, extended the deadline on its offer
to buy shares of the company it does not already own.
 At 10:25 a.m. (1525 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was up 77.56 points, or 0.58
percent, at 13,517.67. Seven of its 10 main sectors were
stronger, including energy shares, up 0.7 percent, despite a
slip in oil prices. [O/R]
 "This has been a very, very hyper-sensitive market that
we're in and so it wouldn't take much to change sentiment as
we've seen of late," added Sprung.
 "Investors are getting more confident that a recovery is
taking place, but there are still lingering doubts as to the
sustainability of that recovery."
 In individual company news, Brookfield Asset Management
BAMa.TO shot up 1.5 percent to C$32.79 after it agreed to buy
113.3 million shares of mall operator General Growth Properties
Inc GGP.N from Fairholme Fund for about $1.7 billion.
 Tim Hortons Inc THI.TO dropped 1.7 percent to C$40.61
after a rating cut by RBC. [ID:nWNAB5183]
 (Reporting by Claire Sibonney; editing by Rob Wilson)