CANADA STOCKS-Miners lift TSX to end 2010 on high note

Fri Dec 31, 2010 4:59pm EST
 
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   * TSX up 8.81 points at 13,443.22, led by miners
 * Index puts in best December in 5 years
 * TSX up 14.4 percent for 2010
 (Updates to close, adds details, commentary)
 By Claire Sibonney
 TORONTO, Dec 31 (Reuters) - Toronto's main stock index
pushed higher on Friday in sparse New Year's Eve trade, as
strong metal prices and a rally by miners kept the market on
track for its best December in five years and double-digit
growth in 2010.
 The index was up 3.8 percent for the month and 14.4 percent
for the year, touching its highest level since August 2008 in
the previous session.
 On the day, materials gained 0.7 percent as copper capped
2010 with a run of records and the price of gold notched its
10th annual gain. Spot silver also had a standout year, the
second best performer among precious metals after palladium.
[MET/L] [GOL/]
 Silver Wheaton SLW.TO jumped 3 percent to C$38.98, while
Barrick Gold Corp (ABX.TO: Quote) firmed almost 1 percent to C$53.12
and Teck Resources TCKb.TO rallied 1.4 percent to C$61.79.
 Financials ended up 0.1 percent, but mostly offset by
energy shares which closed 0.1 percent down.
 In individual company news, Baffinland Iron Mines BIM.TO
climbed 3.6 percent to C$1.43 after steel giant ArcelorMittal
(ISPA.AS: Quote) raised its bid to C$550 million, or C$1.40 a share,
in pursuit of the miner's vast undeveloped iron ore deposit in
the Arctic. [ID:nLDE6BU0GO]
 Shares of Imax Corp IMX.TO surged 4.3 percent to C$28.04
on a report that Sony Corp (6758.T: Quote) or Walt Disney (DIS.N: Quote)
might be interested taking it over. [ID:nN31136169]
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE finished the last trading day of the year up 8.81
points, or 0.07 percent, at 13,443.22. The index is up more
than 20 percent from lows seen in February and July.
 "Everyone's gotten a lot more comfortable that the global
economy really is in a sustained rebound," said Kate Warne,
Canadian market strategist at Edward Jones in St. Louis,
Missouri. "It's not too surprising that commodities led the way
as growth expectations really ratcheted up in the last few
months."
 The year's decent performance was better than many had
expected.
 "It was a year where you actually had a double-digit
return, which I think would have been a surprise to everybody
at the beginning of this year, if only because last year was so
strong," said Gavin Graham, president of Graham Investment
Strategy.
 Last year the TSX rebounded from one of its worst years
ever in 2008, rising 31 percent -- its strongest performance
since 1979.
 Looking to 2011, observers are optimistic that solid global
growth and corporate earnings will deliver a healthy market,
but expect more volatility.
 Joe Ismail, technical analyst at Maison Placements Canada
in Edmonton, Alberta, said the next critical resistance level
to breach is around 13,800 -- an area last seen in mid-2008,
when the 10-week and 40-week moving averages crossed.
 He said that move would establish a new bullish trend in
the market that would make way for an all-time high for the TSX
in the range of 15,500 to 16,000 points in the second half of
next year.
 "The first week of January you're going to see some buying
power coming in because it's going to be a new year, everybody
is padding up their portfolio a little bit and they're going to
push the market to positive territory," he said.
 Risks are plentiful however -- from monetary tightening in
emerging markets to sovereign debt worries in the euro zone and
a depleting arsenal of stimulus measures in the United States.
 BEST AND WORST OF 2010
 The year's best performing sector on the TSX was the small
healthcare group, which soared 40 percent -- propelled by
Biovail Corp's $3.3 billion merger with U.S.-based Valeant
Pharmaceuticals (VRX.TO: Quote). However, the sector makes up less
than 1 percent of the index.
 The materials group, home to gold and base-metal miners and
fertilizer producers, shot up 36 percent, boosted by record
metal prices and China's stunning demand prospects.
 Consumer discretionary issues came in third, advancing 22
percent, as better than expected spending boosted retailers.
 Lagging the overall market performance however were the
energy group, which rose 9 percent, and financials, which added
only 4 percent.
 While U.S. crude futures ended 2010 above $91 a barrel, up
15 percent for the year, the energy sector took a hit from weak
natural gas futures, which skidded 21 percent.
 "Earnings have been very strong, especially on the resource
side where you came back from the depression-era prices that
people were seeing in 2009, and that is 50 percent of the
Canadian stock market," added Graham. "Also you had pretty good
numbers out of the banks and financials."
 Canadian banks, touted as the world's soundest through the
financial crisis, had a fine year, with the notable exception
of Royal Bank of Canada (RY.TO: Quote), the index's most heavily
weighted stock, which lost 7 percent due to disappointing
results and problems with its U.S. operations.
 Insurance companies, which are particularly sensitive to
low interest rates and soft returns on equity markets, were
hard hit but have since rebounded.
 ($1=$1 Canadian)
 (Reporting by Claire Sibonney; editing by Rob Wilson)