4 Min Read
* TSX up 80.34 pts, or 0.6 pct, at 13,334.48
* Eight of 10 main sectors stronger
* BoC leaves rates on hold, sees hike on horizon (Updates with details, commentary)
By Claire Sibonney
TORONTO, July 19 (Reuters) - Toronto's main stock index advanced on Tuesday morning as commodity prices firmed in a rebound of riskier assets and a more hawkish sounding Bank of Canada gave investors more confidence in domestic companies.
Oil, copper and other resources rose as Wall Street opened higher on upbeat corporate earnings, better than expected U.S. housing data and hopes that Chinese demand will remain firm. [O/R] [MET/L]
Among the most influential climbers, Suncor Energy (SU.TO) rose 2.4 percent to C$38.46, Potash Corp (POT.TO) added nearly 3 percent to C$57.92 and Canadian Natural Resources (CNQ.TO) gained 2.5 percent to C$40.48.
John Kurgan, senior market strategist at commodity futures brokerage Lind Waldock, said the Bank of Canada's statement earlier in the morning also served to attract investment to the domestic market.
The central bank held its key interest rate steady at 1 percent as expected. However, it hinted more strongly than before that it would resume hiking rates soon as the sturdy domestic economy contrasts with rising risks globally, sending the Canadian dollar to a two-month high against the greenback. [ID:nN1E76I045]
"I don't think interest rates are going to skyrocket here, but I think investors worldwide are going to take some comfort when they look towards Canada. They're going to see a firm currency, they're going to see an economy that is getting back to normal," said Kurgan.
"A lot of these things right across the board are showing me that the Canadian economy is going to be the envy of the world here."
At 10:45 a.m. (1445 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 80.34 points, or 0.6 percent, at 13,334.48. Eight of the 10 main sectors were stronger.
On the downside, gold miners slid 1.6 percent as bullion prices eased from record highs amid renewed risk appetite, dragging materials 0.1 percent lower. [GOL/]
Goldcorp Inc (G.TO), off 2.1 percent at C$51.69, was the heaviest decliner after helping to lead the gains on Monday. Barrick Gold (ABX.TO), the world's biggest gold producer, was down 1.3 percent at C$46.43.
Kurgan noted the gold miners were lagging the price of the precious metal, partly because investors have shown a preference to own the safe-haven commodity directly, which is reflected in the ETF and futures markets.
"People want to own the underlying gold as opposed to buying a derivative of gold ... Where they're buying the miners, then you have the risk of management, of getting the gold out of the ground ... rather than a pure play," he said.
"Typically, that doesn't stay for very long. If gold keeps advancing the mining shares should eventually come to party. You can't have gold shares where they are pulling gold out of the ground trading at such a huge discount to the underlying gold price."
Investors were also focusing on a euro zone summit to be held on Thursday, hoping it will complete a second bailout for Greece in an attempt to stop the sovereign debt crisis from seriously infecting larger countries, notably Italy and Spain.
As well, risk aversion among investors has been stoked by the approaching U.S. Aug 2 deadline on the federal borrowing limit. Political leaders in Washington are still at an impasse. [ID:nN1E76H1Y0]
($1=$0.95 Canadian) (Reporting by Claire Sibonney; editing by Rob Wilson)