May 17, 2013 / 12:37 PM / 6 years ago

TSX rises as gold miners lone sore spot

TORONTO (Reuters) - Canada’s main stock index rose on Friday as robust economic data helped drive gains in energy stocks and financial shares, offsetting weakness in gold producers.

A general view of the TSX (Toronto Stock Exchange) Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch

The materials sector, a major component of the S&P/TSX composite which includes gold miners, was the lone sector to finish in the red of ten main sectors, as the price of gold fell for a seventh straight session. <GOL/>

That weakness in gold came after some Federal Reserve officials said the U.S. central bank might begin to pull back from its easy monetary policies this summer, comments which were interpreted elsewhere as a strident stamp of approval on economic recovery.

Investors were further encouraged after a gauge of future U.S. economic activity rose to its highest level in nearly five years in April as firming housing and labor market conditions offset weakness in manufacturing.

“People were already anticipating the leading indicator number would be pretty good” after a string of earlier data pointing toward economic recovery, said Marcus Xu, a portfolio manager at MY Capital Management Corp in Vancouver.

“Then it came out and beat the estimates by quite a bit,” he said.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended the day up 105.45 points, or 0.84 percent, at 12,613.05. It gained 0.2 percent for the week.

The commodities-heavy benchmark Canadian index is up slightly more than 1 percent on the year, badly trailing the near-16 percent year-to-date rise on the Wall Street benchmark S&P 500 .SPX index.

But Xu added the TSX could still catch up as the beaten-down resources sector wins back supporters.

“People are starting to look at the energy sector ... that’s a good sign because energy is one of the major, major engines for economic growth, he said. “The energy stocks are still underperforming the commodities.”

The Toronto market will probably be higher by year-end, but room for upside is limited, said Keith Richards, a portfolio manager and technical analyst at ValueTrend Wealth Management.

“I’m warmly bullish on the TSX,” he added. “The TSX is fighting softer trends in the commodities.”

Royal Bank of Canada’s (RY.TO) 1.9 percent gain, to C$62.17, was the single biggest force carrying the index higher. Suncor Energy Inc (SU.TO), Canada’s largest energy company, advanced 2.6 percent to C$32.92.

In company news, the Federal Reserve Board said it told Bank of Montreal (BMO.TO) to step up efforts at the bank’s Chicago branch to detect and prevent money laundering. The stock rose 1.1 percent to C$62.18.

Shares of gold producers fell more than 3 percent, dragging the broader materials sector down 1.6 percent. The energy sector gained 2 percent as oil bounced higher for a third straight day, and the financial sector added 1 percent.

Additional reporting by John Tilak, editing by G Crosse

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