August 7, 2012 / 9:18 PM / 7 years ago

CANADA STOCKS-TSX closes at 1-month high on ECB hopes

* TSX up 200.91 points, or 1.7 percent, at 11,863.50
    * Highest closing level for index since July 4
    * Mining, energy shares lead gains as commodities rise
    * Sentiment boosted by hopes of further ECB action

    By Alastair Sharp
    TORONTO, Aug 7 (Reuters) - Canada's main stock index closed
at its highest level in more than a month on Tuesday, boosted by
investor hopes for more central bank action in Europe and a
bounce in energy and mining shares as commodity prices rose.
    Toronto stocks followed global markets, which have enjoyed a
strong run so far this week on investor expectations the
European Central Bank will buy bonds to ease the pressure on
Spain and Italy, albeit under strict conditions that have yet to
be fully worked out. 
    "Given that valuations remain very reasonable, both solid
fundamentals in conjunction with some decent macro-economic news
continue to see the market going higher," said Bob Gorman, chief
portfolio strategist at TD Waterhouse.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 200.91 points, or 1.7 percent, at 11,863.50.
The second straight session of solid gains took the index to its
highest close since July 4.
    All of Canada's 10 main sectors were higher. The
heavily-weighted energy group led gains, climbing as oil prices
rallied on supply worries. 
    The sharp rise added momentum to a rally that began on
Friday after positive U.S. payroll data fueled broad commodity
price gains.
    U.S. stocks rose further while Canadian exchanges were
closed on Monday for a public holiday.
    The biggest gainers on Tuesday included Canadian Natural
Resources, which added 7.3 percent to C$30, Suncor
Energy, which gained 1.9 percent to C$32.23 and Cenovus
Energy, which jumped 4.5 percent to C$32.79.
    The influential materials group, which includes miners,
jumped 2.9 percent as metal prices climbed. 
    Leading the way were top gold producers Barrick Gold
, up 3.4 percent at C$33.96, and Goldcorp Inc,
which climbed 2.7 percent to C$37.07.
    First Quantum Minerals rose 5.4 percent to C$20.01
following news the Canadian miner has partnered with a Zambian
company to develop a new copper mine in central Zambia.
    Meanwhile, the more serious tone from European central
bankers helped reassure investors, though asset managers
remained cautious. 
    "Part of this rally is predicated on central banks doing the
right thing," said Elvis Picardo, vice president of research at
Global Securities in Vancouver. "Whether that comes to pass is
extremely difficult to say."
    Picardo said the next test of the Toronto market's recent
rally would likely come with the release of Canadian jobs data
on Friday. "It could really could go either way. If the numbers
are really bad, perhaps we could see the local rally stall a
little bit."
    Elsewhere, Air Canada ended down 0.9 percent at
C$1.15. The company said passenger levels for July fell slightly
from a year earlier. Meanwhile, rival WestJet Airlines 
said it flew fuller planes in the month. It gained 0.9 percent
to C$16.16.
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