June 18, 2012 / 9:09 PM / 7 years ago

CANADA STOCKS-TSX rallies on gold miners, Europe weighs

* TSX ends up 76.23 pts, or 0.7 pct, at 11,601.13
    * Miners lead gains, financials weigh
    * Rally after Greek election subsides
    * Stimulus hopes rise ahead of U.S. Fed meeting

    By Jon Cook
    TORONTO, June 18 (Reuters) - Canadian stocks rose on Monday,
climbing with gold mining and defensive shares as investors
remained nervous about the euro zone's lingering debt crisis,
despite a weekend victory for pro-bailout parties in Greece.
    Financial markets' relief at the Greek vote was offset by
worries over its unresolved problems, the lack of a clear plan
for the euro zone as a whole, and uncertainty ahead of meetings
of the Federal Reserve and Group of 20 this week.
    "A lot of bad news has been priced into equities over the
last little while," said Philip Petursson, director of the
portfolio advisory group at Manulife Asset Management. "There is
much less downside and that is keeping the markets relatively
buoyant today."
    Nearly all of Canada's 10 main sectors were higher. Leading
the way was the heavyweight materials group, which jumped 2.2
percent. Most of the gains came from gold miners, as bullion
prices rose on hopes of further monetary easing by the U.S.
Federal Reserve. 
    "That might be acting as a positive catalyst for the
markets," said Petursson, but added that if the U.S. central
bank were to act, it likely wouldn't be until later this summer.
    Barrick Gold, the world's top gold producer, was up
2.2 percent at C$41.18, while Goldcorp Inc climbed 1.3
percent to C$40.68. Mid-level miner Kinross Gold spiked
nearly 4 percent to C$9.39. 
    Yamana Gold Inc rose 2.4 percent to C$16.75 after
the gold miner said it would buy competitor Extorre Gold Mines
Ltd for C$412.9 million ($403.44 million) to build its
portfolio of high-grade gold and silver deposits in Argentina.
Yamana also raised its quarterly dividend by 18 percent.
Extorre's shares surged 68 percent to C$4.27. 
    "You have these gold companies that historically haven't
been big dividend payers, but now they're stepping up
recognizing what investors want and providing that," said
    The Toronto Stock Exchange's S&P/TSX composite index
 finished up 105.68 points, or 0.9 percent, at
11,630.23. It was its highest close in nearly two weeks.
    Canada's small defensive healthcare sector rose 2.2 percent,
led by drugmaker Valeant Pharmaceuticals International Inc
, which jumped 3.3 percent to C$47.42. On Friday,
Valeant said it will buy privately held drugmaker OraPharma for
about $312 million, to enter the dental market. 
    Potash Corp gained 1.6 percent to C$39.92 as the
fertilizer producer was helped by higher corn and soy prices on
fears that dry conditions might limit U.S. crop prospects.
    Markets initially rallied on news that Greece's center-right
New Democracy party, which backs Athens' international bailout
plan, is pushing to form a coalition after its narrow victory in
Sunday's election.    
    However that optimism was curbed by rising Spanish and
Italian bond yields and after German Chancellor Angela Merkel
said on Monday she does not see any reason to speak about a new
aid package for Greece.  
    "People are more concentrated on what's after Greece and now
they're talking about the Spanish and Italian markets," said Sid
Mokhtari, market technician and director, institutional equity
research, CIBC World Markets. "No one wants to make a
directional bet, that's why volume is pretty tame and on the
lighter side."
    Canadian financials were the lone negative sector on Monday,
falling 0.3 percent. Losses were driven by Royal Bank of Canada
, down 0.7 percent to C$50.90, Toronto-Dominion Bank
, off 0.5 percent at C$78.57, and Bank of Nova Scotia
, which slid 0.7 percent to C$51.60.
    In other news, shares of Research in Motion Ltd 
 shed 2.7 percent to C$10.87 after contract electronics
manufacturer Celestica Inc said it will stop making
products for the struggling BlackBerry maker, its largest
customer, over the next three to six months as the BlackBerry
maker shrinks its global supply base.
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