TORONTO (Reuters) - Canada’s main stock index rose on Monday after a partial U.S. government shutdown boosted bullion’s safe-haven appeal and caused a jump in gold-mining stocks.
The shutdown neared its second week and highlighted a political standoff over U.S. debt and budget levels. With no resolution on the horizon, U.S. lawmakers braced for an October 17 deadline to increase the country’s borrowing power or risk default.
The Toronto market outperformed the S&P 500 .SPX, gaining for a second straight session.
“Overall this is a market that is trying to move ahead,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver. “It points to the fact that investors are willing to take some risk.”
Investors certainly do not expect the worst-case scenario of a U.S. default to materialize, he added. “It’s a bit of an ostrich-in-the-sand type of attitude.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 29.60 points, or 0.23 percent, at 12,788.25.
Seven of the 10 main sectors on the index were higher.
A 2.2 percent jump in gold producers helped boost the materials sector, which includes mining stocks.
“Gold stocks seem to be quite undervalued,” Picardo said. “Some of the money is flowing into that sector purely based on the uptick in gold prices.”
The price of bullion rose more than 1 percent. <GOL/>
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Editing by Nick Zieminski and Chris Reese