TORONTO (Reuters) - Canada’s main stock index pushed higher on Thursday as gold issues were driven by strong results and higher bullion prices, more than making up for telecom stocks that weakened on concerns about growth in the sector.
Gold, which is down 20 percent this year, hit a one-month high on expectations of continued stimulus from the U.S. Federal Reserve. U.S. crude futures also strengthened.
“From a commodity point of view, that helped to feed the market to some degree,” said Michael Sprung, president at Sprung Investment Management.
Agnico-Eagle Mines Ltd (AEM.TO) shot up 18.5 percent to C$31.82, after the gold producer posted stronger-than-expected quarterly results and raised its full-year production forecast. Larger rival Goldcorp (G.TO) gained 4.5 percent to C$27.76, also on robust results.
The TSX material subgroup, which includes TSX precious and base metals producers, surged 2.9 percent.
Also driving the materials group was coal and base metals miner Teck Resources TCKb.TO on the back of strong results. Its shares gained 3.8 percent to C$30.54.
A 1.6 percent drop in Potash Corp POT.TO shares to C$32.41 tempered the group’s gains. The fertilizer producer reported a sharp drop in third-quarter earnings and cut its full-year outlook more than expected.
Six of the ten TSX subgroups ended the session higher.
The heavily-weighted energy group climbed 0.9 percent, led by Husky Energy (HSE.TO), which climbed 1.6 percent to C$29.68, and Canadian Natural Resources (CNQ.TO) which advanced 1.6 percent to C$33.06.
All told, the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE unofficially closed up 81.43 points, or 0.61 percent, at 13,324.75.
The index has been on fire over the past two weeks, climbing nearly 5 percent and trading at its highest level in more than two years due in part to expectations of continued Fed stimulus.
Thursday’s surprise signal by the Bank of Canada that it will not raise interest rates in the near future also likely helped, although Sprung believes the stock rally is likely overdone, and took little comfort from the Bank of Canada’s move.
“I think there’s enough concern that this economy could falter, and certainly I think yesterday’s announcement to sort of hold rates down for a while is some evidence of the fragility of this recovery,” he said.
Among individual movers, Canadian patent licensing company WiLan Inc WIN.TO dove 22.6 percent to C$3.16 after a jury ruled that Apple (AAPL.O) did not infringe a patent it held, leading several analysts to downgrade their view of the stock.
While the corporate results on the resource side were largely positive, among telecom stocks, the results were a weight.
Shaw Communications Inc (SJRb.TO) retreated 3.4 percent to C$24.48 after it reported a smaller fourth-quarter profit, while rival Rogers Communications Inc (RCIb.TO) eased 2.7 percent to C$45.83 after it reported weaker revenue at its wireless unit. As a group, the telecoms fell 1.2 percent.
Reporting by Cameron French; Editing by Bob Burgdorfer