October 5, 2009 / 9:28 PM / in 8 years

CANADA STOCKS-TSX gains as US data lifts oil, banks and hope

 * TSX closes up 1.32 percent at 11,102.62
 * Goldman’s U.S. bank upgrade also lifts Canadian lenders
 * U.S. services sector data spurs market optimism  (Adds details and comments)
 By Ka Yan Ng
 TORONTO, Oct 5 (Reuters) - Toronto’s main stock index finished more than 1 percent higher on Monday as investors returned to equities following a two-week slide, snapping up shares of banks and oil and gas companies.
 Bank shares that were unloaded last week helped power a broad rally on the Toronto index, mirroring strong gains in the United States that were made after Goldman Sachs raised its rating on large U.S. banks to “attractive” from “neutral”. [ID:nBNG508012]
 Royal Bank of Canada (RY.TO) led heavyweight gainers, rising 1.8 percent to C$56.15. Shares of Bank of Nova Scotia (BNS.TO) climbed 2.13 percent to C$47.08, while Bank of Montreal (BMO.TO) shares rose 1.3 percent to C$52.50.
 Energy shares, led by EnCana (ECA.TO), were also among the big gainers on Monday, buoyed by a price of oil that settled above $70 a barrel. [O/R] EnCana rose 1.4 percent at C$60.45, while Canadian Natural Resources (CNQ.TO) jumped 1.75 percent to C$69.62.
 Some of the positive sentiment that boosted all 10 of the index’s main sectors stemmed from U.S. data that showed the services sector, representing about 80 percent of the U.S. economy, expanded for the first time since August 2008. [ID:nN05400003]
 “That’s a big piece of the U.S. economy. Clearly the financials will benefit on both sides of the border if the U.S. economy is growing more strongly than people had thought. Most stocks that would benefit from stronger economic growth have moved higher today,” said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.
 “I think what we’re seeing is people who had been worrying for the last week or so that growth would be weaker are today feeling a bit more confident that in fact the economy is pulling out of recession.”
 The S&P/TSX composite index .GSPTSE closed up 144.29 points, or 1.32 percent, at 11,102.62.
 It had a shaky start in the morning after shedding 4.3 percent and touching its lowest level in a month last week. The lower prices opened the door to some buying by investors who were optimistic that upcoming data and corporate news will paint a more upbeat economic picture.
 “We’ve really been going down for a while and people are looking ahead and thinking that October is not going to be the bad or brutal month that we always seem to anticipate,” said Sal Masionis, stockbroker at Brant Securities.
 “Usually bottoms are made in October. We’ve been drifting down for a while and now there is just a little bit of enthusiasm for equities.”
 Other active issues on Monday included Ivanhoe Mines (IVN.TO) and Canadian Hydro Developers Inc KHD.TO.
 Ivanhoe shares hit a 23-month high and finished up 2.1 percent at C$13.91 after the miner said it is about to sign a long-awaited investment deal for its $3 billion Oyu Tolgoi copper and gold deposit in Mongolia. [ID:nPEK216609]
 Meanwhile, TransAlta Corp (TA.TO) said that green-power producer Canadian Hydro has accepted a C$1.6 billion sweetened acquisition offer, ending a three-month takeover battle. [ID:nN05375014]
 Canadian Hydro shares rose 4.4 percent to C$5.23, while shares of TransAlta edged up 0.14 percent to C$21.15.  (Editing by Peter Galloway)                                      

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