October 6, 2009 / 3:44 AM / 8 years ago

TSX pushes higher with surging gold price

4 Min Read

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007.Mark Blinch</p>

TORONTO (Reuters) - Toronto's main stock index jumped on Tuesday as economic recovery hopes got an unexpected shot in the arm and record high gold prices boosted shares of Barrick Gold and other gold miners.

Market heavyweight Barrick was up 3.98 percent at C$41.25, making it the day's top gainer. Shares of fellow miner Goldcorp were not far behind, up 4.8 percent at C$44.22.

Yamana Gold gained 7.6 percent to C$12.05 after it said third-quarter production rose 9 percent from the previous quarter, while costs remained in line with expectations.

Gold prices hit a record high above $1,040 an ounce after a media report, later denied, that Gulf Arab states were in talks to abandon the U.S. dollar in oil trade.

Energy shares got a boost after a U.S. government agency raised its forecast for world oil demand for the fourth quarter, lifting oil prices above $71 a barrel.

Shares of Suncor Energy, the second-biggest contributor to the index's gain, advanced 2.7 percent to C$36.45, while Talisman Energy rose 5.5 percent to C$19.29.

The S&P/TSX composite index finished with a triple-digit gain for a second straight session, up 145.35 points, or 1.3 percent, at 11,247.97, recovering another portion of last week's 4.3 percent slide. The TSX was up more than 2 percent before relinquishing some gains.

Eight of the index's 10 main sectors were higher, led by a 4.14 percent surge in the materials group, which is home to gold miners.

"It looks like last week's caution has been replaced by something that is beginning to resemble euphoria at this stage," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver, British Columbia.

Gains were strong from the get-go with sentiment getting a boost from the Reserve Bank of Australia's decision to raise interest rates, making it the first G20 central bank to hike rates. The unexpected move gave credence to the view that the recession is easing.

More evidence emerged on Tuesday that the Canadian economy is pulling out of recession, with stronger business purchasing activity and a rise in the value of building permits. However, economists were guarded in their enthusiasm, saying that the September jobs figures, due this Friday, will offer a better indicator.

But even as market players seized on the Australian rate hike as good news, analyst Michael Sprung said the interpretation may have been "a bit over-reaching."

"I think that it's a little bit premature to be thinking that the worst is behind us," said the president of Sprung & Co Investment Counsel.

"The Canadian market was firing on most cylinders. If there was any weakness anywhere it appeared to be in the financials, which would be more directly hit by any tightening of credit."

Toronto-Dominion Bank led all decliners, dropping 1.3 percent to C$64.81, while Royal Bank of Canada slipped 0.89 percent to C$55.65.

Rogers Communications was also among top losers on news that rivals BCE Inc and Telus have struck a deal with Apple Inc to offer the iPhone, ending a monopoly that Rogers had held for more than a year.

Rogers Communications lost 3.1 percent to C$28.05, while BCE gained 0.27 percent to C$26.37 and Telus edged up 0.03 percent to C$33.97.

The news also put BlackBerry maker Research In Motion under early pressure as the company may now have to fight for subscribers on its home turf. But RIM fought back, ending the session up 0.24 percent at C$70.30.

($1=$1.06 Canadian)

Reporting by Ka Yan Ng; editing by Peter Galloway

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below