CANADA STOCKS-TSX up on U.S. stimulus hopes, but golds drag

Mon Aug 29, 2011 10:45am EDT
 
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 *TSX up 93.22 points, or 0.75 pct, at 12,419.73
 *Gold miners fall 2.4 percent, sliding with gold prices
 (Updates with details, comments)
 By Claire Sibonney
 TORONTO, Aug 29 (Reuters) - Toronto's main stock index rose
on Monday after a speech by U.S. Federal Reserve Chairman Ben
Bernanke on Friday left the door open to further U.S. stimulus
action, though a sharp drop in gold prices held back gains.
 Energy stocks, up 2.1 percent, powered much of the rally.
Canadian Natural Resources CNQ.TO was the most heavily
weighted climber, jumping 3 percent to C$35.89 as oil prices
advanced on strong U.S. equities, relief that Hurricane Irene
did less damage than feared in the New York area, and a weaker
U.S. dollar. [O/R]
 Fertilizer producer Potash Corp POT.TO was the second
biggest gainer, up 2.2 percent at C$57.36 as grain prices
rose.
 Heavyweight financials, up 1 percent, were also among the
top advancers at the start of the second week of bank-earnings
season. Bank of Nova Scotia BNS.TO rose 1.7 percent to
C$52.21, while Toronto-Dominion Bank TD.TO added 1 percent to
C$74.61.
 At 10:16 a.m. (1416 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was up 93.22 points, or 0.75
percent, at 12,419.73. Earlier in the day, it was up almost 1
percent at 12,446.06, its highest level since Aug. 18.
 Don Vialoux, a technical analyst at JovInvestment
Management, said the TSX's short-term momentum indicators are
positive as they continue to recover from oversold levels and
as the index has recently outperformed the S&P 500.
 He noted a natural place for the TSX's recovery to advance
to is where it broke a key support level at 12,764, which is
also very close to its 50-day moving average.
 "I'm looking for the market to be quite strong over the
next week or two, followed by at least a moderate test of its
August low, followed by a very important move on the upside
starting in October," he added.
 Markets started to embrace risk assets after Friday's
speech by Bernanke. Though he gave no details of further
measures to boost the U.S. economy, he said the central bank's
policy panel would meet for two days next month instead of one
to discuss additional monetary stimulus, offering some hope to
the market of a move then. [nN1E77R0GB]
 Gold miners, down 2.4 percent as bullion prices tumbled,
held back the TSX, causing the index to underperform its U.S.
counterparts. [GOL/]
 Among the biggest decliners, Barrick Gold ABX.TO lost 2.8
percent to C$48.55, Goldcorp G.TO fell 2.8 percent to
C$49.58, and Silver Wheaton SLW.TO dropped 4.1 percent to
C$37.22.
 AuRico Gold AUQ.TO was also a heavy laggard, plunging
more than 13 percent to C$11.92 after the company said it will
buy Northgate Minerals NGX.TO for C$1.46 billion to create an
intermediate-sized gold company. [nL4E7JT1Q9]
 In other individual company news, Air Canada ACa.TO fell
0.6 percent to C$1.70. The country's largest airline's flight
attendants rejected a tentative contract that union bargainers
negotiated with the company, and the union has scheduled a
strike vote for next month. [nN1E77Q0ET]
 ($1=$.98 Canadian)
 (Reporting by Claire Sibonney; editing by Peter Galloway)