March 23, 2011 / 9:41 PM / 7 years ago

CANADA STOCKS-Flight to safe-haven gold pushes TSX higher

 * TSX rises 87.18, or 0.62 pct, to 14,087.18
 * Eight of the index’s 10 main groups higher
 * Materials rise 2.8 pct, led by golds  (Updates with details, comments)
 By Cameron French
 TORONTO, March 23 (Reuters) - Toronto’s main stock index climbed to a two-week high on Wednesday, driven up by financial issues and gold stocks, while energy stocks weighed on the market.
 Gold was helped by safe-haven buying that pushed bullion to within a whisker of its record high of $1,444.40 an ounce. Disappointing U.S. housing data, tensions in oil-producing countries, and fears that a crucial vote in Portugal could topple the government also fueled the flight to safety.
 The TSX materials sector charged ahead 2.8 percent, led by shares of the world’s top two gold producers by market capitalization. Barrick Gold (ABX.TO) rose 3.7 percent to C$51.05, while Goldcorp (G.TO) climbed 3.6 percent to C$48.84.
 Silver prices charged to a 31-year high above $37 an ounce, which also boosted gold miners.
 “The continued turmoil, especially the developments we’ve seen since the beginning of this year, they kind of support the thesis that gold prices will continue to rise,” said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended the session up 87.18 points, or 0.62 percent, at 14,087.18.
 The index hit a record high on March 7, but was knocked off its perch by the deepening crisis in Libya, and then fell further after the earthquake and tsunami in Japan. But Canadian stocks have been on the rebound over the past week.
 Eight of the TSX index’s 10 subgroups rose on Wednesday.
 The heavily weighted financial sector rose 0.44 percent, led by Canadian Imperial Bank of Commerce (CM.TO), up 1.4 percent at C$85.49, and Toronto-Dominion Bank (TD.TO), which rose 0.8 percent to C$85.22.
 Energy producers sagged 0.7 percent, hurt by concern over British tax changes announced on Wednesday that would reduce the profitability of energy producers in the North Sea.
 Nexen Inc NXY.TO, which operates the Buzzard field in the North Sea, slid 7.9 percent to C$24.19, while Suncor Energy (SU.TO) dropped 1.4 percent to C$44.09, and Talisman Energy retreated 2.7 percent to C$23.24.
 Threats of a spring election in Canada seemed to have little impact on the stock market or the Canadian dollar.
 Canada’s minority Conservative government looked set to fall in Parliament by the end of the week after all three opposition parties said they would back a motion of nonconfidence. If the government is brought down an election will follow. The motion follows the release of a federal budget on Tuesday that drew criticism from the opposition parties.
 “I think overall the election has sort of been taken in stride. It’s not being seen as a major risk factor,” Picardo said.
 ($1=$0.98 Canadian)  (Reporting by Cameron French; editing by Peter Galloway)                                        

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