TORONTO (Reuters) - Canada’s main stock index advanced on Thursday, recovering from a sell-off to a five-month low the day before, as a spike in commodity prices fueled gains in shares of energy and gold-mining companies.
Gold prices jumped as their recent sharp drop triggered a spate of buying of gold bars and coins, and Brent crude oil snapped a six-session losing streak as dealers said it looked oversold. <GOL/> <O/R>
The gains on the TSX index were kept in check by U.S. economic data. Growth in factory activity in the U.S. mid-Atlantic region fell unexpectedly in April, and the Conference Board said its Leading Economic Index dropped 0.1 percent.
The Toronto index, down about 3.5 percent since the start of the year, outperformed the U.S. market on Thursday because of its sharp exposure to resources.
“On a relative basis, Canadian equities are starting to look more attractive,” said Youssef Zohny, portfolio manager at Stenner Investment Partners, a unit of Richardson GMP.
He said if there is stability in commodity prices, it could prove to be an attractive entry point for investors and help the Canadian benchmark index catch up with other global markets.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 49.05 points, or 0.41 percent, at 11,996.34. Seven of the 10 main sectors on the index were higher.
“The market remains very volatile,” said Irwin Michael, portfolio manager at ABC Funds. “We’re waiting for a catalyst to enable investors to come back in and put their little toe in the water and buy a few things that have perhaps been oversold.”
The materials sector, which includes mining stocks, added 2.3 percent, helped by a 2.8 percent jump in gold stocks.
Bullion prices, which earlier this week recorded their biggest-ever fall, were up about 1 percent.
Goldcorp Inc G.TO added 2.3 percent to C$28.58, and Barrick Gold Corp ABX.TO gained 1.5 percent to C$18.44.
Energy shares were up 1.1 percent, with oil prices rising.
Financials, the index’s most heavily weighted sector, gave back 0.4 percent.
Editing by Bob Burgdorfer