December 27, 2013 / 1:33 PM / 5 years ago

TSX makes broad gains, closes above 30-month high

TORONTO (Reuters) - Canada’s main stock index rose in light trading on Friday, led by energy, materials and financial stocks, extending a two-week rally fed by growing optimism about global economic growth.

People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch

The resource-heavy index was helped by higher commodity prices, said Paul Harris, portfolio manager at Avenue Investment Management in Toronto.

Gold edged higher, copper touched a four-month peak and U.S. crude oil futures rose after government data showed that U.S. oil inventories had fallen for the fourth straight week. <O/R>

“Oil is driven by economic growth, effectively, so we think that oil going up makes a lot of sense in a world that looks like it’s going to be growing a lot faster,” said Harris.

Copper prices hit their highest point in more than four months, boosted by tightening supply and optimism about the recovery. <GOL/> <MET/L>

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 69.96 points, or 0.52 percent, at 13,587.98, its highest close since May 2011.

The exchange was closed for the Boxing Day holiday on Thursday, when U.S. equity markets, where many Canadian companies also trade, pushed higher.

Paul Hand, managing director of RBC Capital Markets, said Canadian stocks were catching up to their U.S. counterparts, though many traders were still on vacation.

“The market has been basically in rally mode - there’s been very little news over the holiday period,” he said. “The glass has been half full for a lot of people in the last few months.”

The U.S. Federal Reserve’s assurance last week that it would keep its key interest rate at rock bottom longer than previously promised - even as it trimmed asset purchases - kicked off a global rally in stocks.

The news resolved uncertainty that had been hanging over the markets, and investors were cheered by the fact that greater confidence in the economic recovery had spurred the Fed.

On Friday, materials stocks gained 1.3 percent, energy stocks rose 0.6 percent, and financial shares were up 0.4 percent.

Potash Corp POT.TO was the most influential gainer, rising 2.1 percent to C$35.36. Toronto-Dominion Bank (TD.TO) also pushed the index higher, rising 0.7 percent to C$99.67. Canadian Natural Resources Ltd (CNQ.TO) rose 1.4 percent to C$35.72.

In company news, Bega Cheese Ltd (BGA.AX), the largest shareholder in Saputo Inc’s (SAP.TO) latest takeover target, Warrnambool Cheese and Butter Factory Co Holdings Co WCB.AX, said it is in talks with “non-Australian” investors on a possible sale of its stake.

In September Bega kicked off a takeover battle with dairy giant Saputo and another Australian cheese maker, but the company declined to extend its final offer last week. Saputo rose 0.5 percent to C$48.64 in early trading.

Editing by Dan Grebler

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