CANADA STOCKS-Gold helps lift TSX as euro deal optimism fades

Fri Oct 28, 2011 5:37pm EDT
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 * Main index up 54.07 pts, or 0.43 pct, at 12,519.51
 * Materials, gold miners drive rise
 * Financials down 0.5 pct
 * Europe deal doubts weigh on markets
 (Adds further analyst comment, details)
 By Jon Cook
 TORONTO, Oct 28 (Reuters) - Canadian stocks closed stronger
on Friday after touching a near two-month high, as gains in the
safe-haven gold sector offset the broader drag from fading
optimism about Europe's deal to solve its debt crisis.
 Toronto stocks had rallied more than 2 percent on Thursday
on the initial euphoria about a deal being reached. But a
weaker sale of Italian bonds that followed showed investor
confidence in the agreement was shaky. [MKTS/GLOB]
 "They (Europe) kicked the can down the road. But it's a
very short road and it looks like we're going to be revisiting
a lot of the problems so gold stocks have been benefiting,"
said John Ing, president of Maison Placements Canada.
 "Precious metals have been and remain the place to hide."
 The materials sector and gold miners were the biggest
drivers. With gold on track for its best weekly gain in two
months, the Canadian gold mining sector rose 2.3 percent.
 Barrick Gold ABX.TO led the sector and broader market
higher, jumping 3.9 percent to C$50.50. Goldcorp Inc G.TO was
also up 3.8 percent to C$49.68.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended up 54.07 points, or 0.4 percent, to 12,519.51.
It touched a session high of 12,541.84, its strongest level
since Sept. 9.
 Further eroding investor optimism, Fitch Ratings called the
plan by European policymakers to force banks to take a 50
percent haircut on their holdings of Greek debt a default.
 "It's a demonstration of the old (adage) buy the rumor,
sell the news," said Gavin Graham, president of Graham
Investment Strategy in Toronto. "Now you're starting to see the
second thoughts and the closer examination and obviously the
market is reflecting that."
 Half of the TSX's 10 main sectors were down. Financials
were the largest drag, falling 0.5 percent after jumping nearly
3 percent the day before.
 The biggest weights on the sector were Manulife Financial
Corp MFC.TO, down 1.9 percent to C$13.68, and Sun Life
Financial SLF.TO, off 2.3 percent to C$25.22.
 In other news, shares of base metal miner Inmet IMN.TO
jumped more than 7 percent. The company said talks with parties
interested in buying a stake in its Cobre Panama copper project
in Central America are continuing and that there has been no
dip in interest despite current global economic concerns.
 Mosaid Technologies MSD.TO, an Ottawa-based wireless firm
that recently acquired about 2,000 patents from Nokia and
Microsoft, rose 5.8 percent to C$45.95 on news it will be
bought by U.S. private equity firm Sterling Partners for C$590
million ($594 million). [ID:nN1E79Q294]
 Looking ahead, the market is expected to focus next week on
a meeting of the Group of 20 nations in France, as investors
try to gauge the willingness of Chinese and U.S. policymakers
to continue to support Europe.
 "Are the Chinese going to come in and buy a bunch of
European bonds? Is the U.S. going to continue to provide the
dollar liquidity to the European banking system?," said
 (Editing by Jeffrey Hodgson)