TORONTO (Reuters) - Canada’s main stock index snapped a five-day losing streak on Monday, rising with world stock markets on aggressive action by Japan’s central bank to stimulate the economy and showing strength in the industrials and telecoms sectors, while gold miners declined.
The gold producers fell as the appetite for equities and comments by billionaire financier George Soros that gold has been destroyed as a safe-haven asset pushed bullion prices lower. <GOL/>
The rise in industrials and telecoms helped the index recover from its worst week in about 10 months. The benchmark index fell 3.3 percent last week as a slew of negative economic news weighed on investors, particularly data on Friday that showed Canada posted its worst monthly jobs loss in more than four years in March.
The Bank of Japan conducted its first government bond-buying operation on Monday since it announced new policy easing steps last week. <MKTS/GLOB>
“The aggressive monetary policies that the Bank of Japan released last week are definitely helping risk assets recover from last week’s pullback,” said Youssef Zohny, portfolio manager at Stenner Investment Partners, a unit of Richardson GMP.
“(But) there’s some frustration for Canadian investors that the Canadian market has underperformed relative to our neighbors in the south,” he added. “The TSX needs to see some firming of commodities.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 12.71 points, or 0.10 percent, at 12,344.56. Six of the 10 main sectors on the index were higher.
The index is down 0.7 percent since the start of the year, while the S&P 500 has gained about 9 percent in the same period.
“The recovery is not taking off completely,” said Irwin Michael, portfolio manager at ABC Funds. “But we believe slowly but surely, the economy is turning the corner.”
Industrial shares advanced 0.7 percent, helped by a 1.8 percent rise in Canadian Pacific Railway Ltd (CP.TO) to C$124.97.
Shares of Bombardier Inc (BBDb.TO) were up 1.8 percent to C$4.00 after the company said its train unit signed an agreement with German engineering group Siemens AG (SIEGn.DE) to supply train components to state-owned rail operator Deutsche Bahn in a deal worth about 336 million euros ($438 million).
Telecoms shares climbed 0.6 percent, with Rogers Communications Inc (RCIb.TO) advancing 1.6 percent to C$51.69.
The materials sector, which includes mining stocks, lost 0.6 percent with the weakness in gold stocks partially offset by gains in Agrium Inc AGU.TO.
Shares of Agrium rose 1.6 percent to C$99.33 after activist shareholder Jana Partners LLC said two of its five candidates appeared to have garnered enough votes to be elected to the fertilizer maker’s 12-member board.
Financials, the index’s weightiest sector, were down slightly.
Royal Bank of Canada (RY.TO) slipped 0.3 percent to C$59.44 after a public uproar over news that the Canadian government is investigating a report that the bank is using temporary foreign workers hired by an outsourcing company to effectively replace existing staff.
Editing by W Simon; and Peter Galloway