July 22, 2013 / 12:33 PM / 6 years ago

TSX hits seven-week high as golds soar with bullion price

TORONTO (Reuters) - Canada’s main stock index climbed on Monday to a seven-week high as a jump in the price of bullion fueled a rally in gold miners and broader positive sentiment lifted financials.

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

The Toronto market outperformed the S&P 500 index .SPX and posted its fourth session of gains in a row.

Investors also cheered a strong election victory by Japanese Prime Minister Shinzo Abe, who vowed to stay focused on reviving the stagnant economy.

The bullion price jumped 3 percent and was on track to post its biggest three-day rally in over a year, helped by weakness in the U.S. dollar and by a lessening of concern that the U.S. Federal Reserve will quickly dial back its stimulus program.

Down significantly on the year, the benchmark Canadian index’s gold-mining sector was up 6.5 percent on Monday.

“Gold was knocked down too far and people realize there is value there,” said Fred Ketchen, director of equity trading at ScotiaMcLeod.

“This market is skittish,” he added. “But there’s probably more confidence in the market than there is fear.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 73.25 points, or 0.58 percent, at 12,758.38, after touching 12,761.44, its highest point since May 30.

The index is up 2.6 percent on the year, still badly trailing U.S. stocks.

The appetite for Canadian stocks has been battered this year by a commodities slump, but there have been signs of strengthening and the index has posted four straight weeks of gains.

It may still be too early to say that sentiment for Canadian equities has shifted, said David Cockfield, managing director and portfolio manager at Northland Wealth Management.

“But let’s say that the first robin has landed. It’s the first indication that things may be changing.”

Seven of the 10 main sectors on the index were higher on Monday. The materials sector, which includes mining stocks, jumped 3.8 percent, boosted by soaring shares of gold miners.

Goldcorp Inc G.TO shot up 5.8 percent to C$29.97 and had the biggest positive influence on the index. Barrick Gold Corp (ABX.TO) jumped 6.4 percent to C$18.25.

Shares of energy companies climbed 0.2 percent. Enbridge Inc (ENB.TO) added 0.5 percent to C$46.79, and Suncor Energy Inc (SU.TO) rose 0.3 percent to C$33.09.

Financials, the index’s most heavily weighted sector, gained 0.5 percent. Royal Bank of Canada (RY.TO), the country’s biggest lender, was up 0.9 percent at C$65.66.

In company news, meat processor Maple Leaf Foods Inc (MFI.TO) said it plans to sell its Ontario turkey farms and hatchery, sending its shares up 2.5 percent to C$15.83.

($1=$1.03 Canadian)

Editing by Peter Galloway and Nick Zieminski

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