May 18, 2012 / 4:53 PM / 7 years ago

CANADA STOCKS-TSX climbs as resource shares rally

* TSX up 62.11 pts, or 0.5 pct, at 11,392.79
    * Gold miners, energy shares lead gains
    * Moody's downgrade of Spanish banks weighs

    By Jon Cook	
    TORONTO, May 18 (Reuters) - Canada's main stock index rose
on Friday as gold miners and energy firms continued to rally
after a month-long swoon, offsetting jitters about a deepening
Spanish banking crisis and uncertainty over Greece's future in
the euro zone.	
    Eight of Canada's 10 main sectors were higher. The
heavyweight materials group led the charge, up 1.2 percent as
miners were boosted by higher gold and copper prices. 
    "Gold stocks are responding nicely to the performance of the
gold commodity," said Sid Mokhtari, director of institutional
equity research at CIBC World Markets. "Everybody was expecting
gold to go lower from these levels, but it has managed to hold
very well."	
    Canada's gold mining sub-index has gained nearly 8
percent the last two days. Friday's most influential gainers
included Goldcorp Inc, up 2.6 percent at C$36.40, Barrick
Gold, up 1.2 percent to C$38.61 and Eldorado Gold
, which climbed 2.5 percent to C$11.29.	
    At 12:30 (1630 GMT), the Toronto Stock Exchange's S&P/TSX
composite index was up 62.11 points, or 0.5 percent,
at 11,392.79.	
    Energy stocks rose 0.9 percent, as surging U.S. natural gas
prices offset a drop in oil, which hit a 2012 low on Friday.
    Canadian Natural Resources rose 1.7 percent to
C$30.28 and Suncor Energy edged up 0.8 percent at
    The TSX was still down 2.6 percent for the week and has
fallen more than 7 percent in May.	
    Conditions in Europe continued to weigh on financial
markets. Investors were spooked by a ratings downgrade of 16
Spanish banks by Moody's Investors Service and fears the sector
may need a bailout that would strain Madrid's already stretched
    "There's a lot of talk about what the downgrades are going
to bring from the banking sector in the European community so
people are still sitting on the sidelines," said Mokhtari.
"Investors are still expecting darker days ahead and that's
what's going to keep a cap on the market."	
    The European Commission and the European Central Bank are
working on scenarios in case Greece has to leave the euro zone,
EU trade commissioner Karel De Gucht said on Friday.
    Canadian financial shares were up 0.3 percent with many
investors holding positions ahead of this weekend's G8 meeting
of leaders of major industrial economies where the euro zone
crisis was expected to dominate discussions.	
    Royal Bank of Canada shares rose 1.3 percent to
C$52.61, but was offset by Bank of Nova Scotia, which
fell 0.2 percent to C$51.60, and insurer Sun Life Financial
, down 0.8 percent to C$21.16.	
    Manulife Financial Corp edged down 0.3 percent to
C$11.13 after a report put Canada's top insurer among a group of
suitors expected to place first-round bids to buy ING Groep's
Asia life insurance unit in a deal worth about $6.5 billion to
$7 billion. 	
    Market watchers in North America were focused on Facebook's
 Wall Street debut after the world's No.1 online social
network raised about $16 billion in one of the biggest initial
public offerings in U.S. history. After a delay in the opening
print that drove up anxiety levels among traders and onlookers
outside the Nasdaq, Facebook stock was up about 7 percent at
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