January 4, 2010 / 10:30 PM / 9 years ago

CANADA STOCKS-TSX ends at 15-month high on resource rally

* TSX up 1.03 pct at 11,866.90, highest since Sept 2008

* Commodity price gains drive rally

* Manufacturing activity in major economies rises

By Ka Yan Ng

TORONTO, Jan 4 (Reuters) - Toronto’s main stock market finished at its highest level in 15 months on Monday, rising more than 1 percent as soaring oil and gold prices and global manufacturing data suggested more improvement in the world economy.

Eight of the top 10 heavyweight advancers were resource-based stocks, including oil companies Suncor Energy (SU.TO) and EnCana Corp (ECA.TO), as oil prices soared above $81 a barrel, and the prices of gold and other precious metals also rallied.

Overall, the index’s energy group rose 2.29 percent, while its mining-heavy materials sector climbed 2.55 percent. Seven of the key index’s 10 main groups higher. [O/R] [GOL/]

Suncor was the biggest heavyweight riser, up 2.9 percent to C$38.30, while EnCana shot up 4.7 percent to C$35.71. Diversified miner Teck Resources TCKb.TO rallied 5.95 percent to C$39.01, while Barrick Gold (ABX.TO) rose 1.5 percent to C$42.08.

Manufacturing data from major economies reinforced evidence that a global recovery may be in motion. Chinese manufacturing grew at its fastest pace on record in December, while U.S. factories marked their best month in nearly four years. Other data showed strength in British and euro zone factory production growth. [ID:nSGE60301H]

“Clearly the stronger manufacturing reports out of China, Europe, and the U.S. are giving investors a bit more confidence that we’ll see continued strong economic growth,” said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.

“That’s the reason we’re seeing the TSX led higher by energy and materials. The commodities are the most sensitive to expectations about higher growth.”

The gains on the first trading session of 2010 put the key Toronto index at its highest level since late September 2008, when a global slide in equity markets was triggered by the collapse of U.S. investment bank Lehman Brothers.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 120.79 points, or 1.03 percent, at 11,866.90. That extended 2009’s momentum, when the index notched its best annual performance since 1979, climbing 30.7 percent.

Recovery bets also lifted U.S. stocks, driving both the Dow Jones industrial average and the S&P 500 to their highest closes in 15 months, while the Nasdaq ended at a 16-month high. [ID:nN04249447]

Manulife Financial (MFC.TO) was the third top gainer on Monday, helping the index’s financial group rise 0.43 percent after a negative start as BMO raised its rating on the insurer to “outperform” from “market perform”. Manulife gained 3.2 percent to C$19.95.

Berens Energy BEN.TO was the most active issue on Monday after news that PetroBakken Energy Ltd PBN.TO would buy the smaller company to establish a position in a prolific but technically challenging oil prospect in Alberta. [ID:nSGE6030HD]

Shares of Berens jumped 32 percent to C$2.67, while PetroBakken gained 2.23 percent to C$33.05.

$1=$1.04 Canadian Editing by Peter Galloway

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