CANADA STOCKS-TSX up on U.S. stimulus hopes, but golds drag
*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: Quote) 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: Quote) rose 1.7 percent to C$52.21, while Toronto-Dominion Bank (TD.TO: Quote) 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: Quote) lost 2.8 percent to C$48.55, Goldcorp (G.TO: Quote) 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)
© Thomson Reuters 2017 All rights reserved.