CANADA STOCKS-TSX rebounds as golds, financials take lead

Wed Oct 20, 2010 5:25pm EDT
 
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   * TSX rises 0.63 percent to 12,649.92
 * Materials, banks lead rise; Encana, Potash key decliners
 * Investors reassess Chinese rate hike
 (Adds details, comment)
 By Ka Yan Ng
 TORONTO, Oct 20 (Reuters) - Toronto's main stock index
rebounded on Wednesday as gold miners and financials were
strong performers in a broad rally a day after the index
slumped on an unexpected Chinese interest rate hike.
 Gold prices rallied as investors assessed the initial
reaction to China's rate hike as overblown, while the greenback
weakened, boosting U.S. dollar-denominated commodities and
sending the index's materials sector up more than 1 percent.
  "The primary trend is investors are looking to scoop up
shares in materials, gold, and companies that could benefit
from quantitative easing (by the U.S. Federal Reserve), which
at this point is still speculation," said Youssef Zohny,
associate portfolio manager at Van Arbor Asset Management.
 Kinross Gold (K.TO: Quote) added 1.7 percent to C$18.59, and Teck
Resources TCKb.TO gained 3.24 percent to C$45.31.
 Financial shares gained 0.72 percent, rising for a fourth
straight session and helped in part by higher earnings at U.S.
bank Wells Fargo & Co. Toronto-Dominion Bank (TD.TO: Quote) rose 1.12
percent to C$76.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE gained 79.37 points, or 0.63 percent, to 12,649.92,
recouping nearly all of Tuesday's losses. Nine of the index's
10 main groups were higher.
 Sentiment was also boosted by a suite of strong corporate
earnings reports in the United States, while the Fed's Beige
Book provided further evidence that additional monetary easing
was coming soon.
 "Generally the mood in the markets is fairly upbeat right
now," said David Baskin, portfolio manager and president of
Baskin Financial Services. "People have recognized that with
interest rates very low, there's no return to be had in the
bond market. So they're being driven into the stock market."
 Shares of space technology company MacDonald Dettwiler
MDA.TO jumped nearly 10 percent on speculation the company
was for sale, but pared gains after the company issued a
partial denial. The stock finished 3.9 percent higher at
C$47.91. [ID:nN20237898]
 WestJet Airlines (WJA.TO: Quote) leaped more than 5 percent after
Canada's No. 2 airline struck its first alliance with a U.S.
carrier, American Airlines, a deal that should boost its
passenger numbers. WestJet pared gains to close up 2.9 percent
at C$12.20.  [ID:nN20203910]
 On the downside, Encana (ECA.TO: Quote) dropped 3.42 percent to
C$29.13 after the country's largest natural gas producer
reported third-quarter profit below market expectations, cut
its 2010 production outlook and lowered its forecast for cash
flow per share. [ID:nSGE69J0FK]
 Potash Corp (POT.TO: Quote) was also a key decliner, down 1.68
percent at C$145.90, after the province of Saskatchewan said it
opposed BHP Billiton's (BLT.L: Quote) hostile $39 billion bid for the
world's largest fertilizer producer. [ID:nSGE69J05K]
[ID:nN20230235]
 ($1=$1.02 Canadian)
 (Reporting by Ka Yan Ng; editing by Peter Galloway)