June 22, 2011 / 3:49 PM / 6 years ago

CANADA STOCKS-TSX rises as gold price makes miners shine

   * TSX up 54.11 points, or 0.41 percent, 13,117.43
 * Seven of the 10 main groups higher  (Adds details, comments)
 By Solarina Ho
 TORONTO, June 22 (Reuters) - Toronto’s main stock index marched higher on Wednesday morning after making healthy gains on Tuesday, powered by a jump in the price of gold to a two-month high, which pushed up gold-mining shares.
 The index’s hefty materials group led gains, climbing 1.51 percent, while its gold-mining subgroup rose 2.28 percent on the back of the stronger bullion prices. [GOL/]
 Goldcorp (G.TO) rose 3.29 percent to C$48.72, while Barrick Gold (ABX.TO) was up 2.86 percent at C$44.17. Eldorado Gold (ELD.TO) powered up 4.09 percent to C$14.25.
 Gold prices rose on continuing European sovereign debt fears and expectations of loose monetary policies from central banks around the world, especially the U.S. Federal Reserve, which was expected to deliver a pessimistic assessment of the economy later on Wednesday.
 Gavin Graham, president of Graham Investment Strategy, said the gold miners were also likely reacting positively to Iamgold’s (IMG.TO) dividend increase late on Tuesday. [ID:nASA02CL6]
 “That’s just the latest in a string of profitable gold companies producing mines, actually paying some of that out to their shareholders...which is a very welcome development,” Graham said.
 At 10:52 a.m. (1452 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 54.11 points, or 0.41 percent, at 13,117.43. Seven of the index’s main groups were higher.
 The gains added to Tuesday’s 1.6 percent jump, its biggest one-day gain in three months.
 The government of Greek Prime Minister George Papandreou survived a confidence vote on Tuesday, the first of three tests it must survive to avert the euro zone’s first sovereign debt default.
 “I think it’s relief about the Greek prime minister winning a vote of confidence last night, meaning there’s a possibility the austerity measures in Greece will go through,” said Graham, but warned that some form of debt restructuring will still have to take place.
 Also helping lead the index higher was a 1.7 percent rise to C$39.82 by Canadian Natural Resources (CNQ.TO). The index’s energy group was up 0.79 percent, bolstered by firmer oil prices. [O/R]
 U.S. crude was up more than $1 in choppy trading after a U.S. government report showed crude oil stockpiles fell more than expected.
 ($1=$0.97 Canadian)  (Reporting by Solarina Ho; editing by Peter Galloway)                                        

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