June 9, 2011 / 9:00 PM / 8 years ago

CANADA STOCKS-TSX rallies higher, ends 7-day slide

* TSX ends up 71.95 points, 0.6 pct, at 13,255.74

* Eight of 10 index sectors higher (Adds details, comments)

By Claire Sibonney

TORONTO, June 9 (Reuters) - Toronto’s main stock index bounced back on Thursday from a seven-day fall as some positive U.S. economic data and higher commodity prices prompted investors to pick up worn-down shares.

Data that showed record-high U.S. exports and a smaller trade deficit in April eased fears about a stalled U.S. economic recovery that had weighed on the market for days. [ID:nN09117731]

The data helped economically sensitive financial stocks rise 0.4 percent. Among them, Royal Bank of Canada (RY.TO) was the index’s second most heavily weighted gainer, rising 0.9 percent to C$54.86.

Resource shares led the advance, with the materials group up 1.5 percent and the energy group ahead 0.3 percent as U.S. crude futures and gold prices marched higher. [O/R] [GOL/]

Gold and base-metal miners rose 1.2 percent as Kinross Gold (K.TO) shot up 3.3 percent to C$15.25 and Teck Resources TCKb.TO jumped 1.9 percent to C$47.50.

Corn futures Cc1 also hit a record high, spurring a rally in fertilizer shares. Potash Corp POT.TO was the most influential climber on the index, surging 3.4 percent to C$53.98, while Agrium Inc AGU.TO was up 2.6 percent to C$82.49.

“We’re seeing some buyers coming back into the market and nibbling a little bit,” said David Cockfield, senior vice-president and portfolio manager at MacNicol and Associates Asset Management.

“Let’s face it, these stocks got fairly significantly beaten up over the last little while.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 71.95 points, or 0.55 percent, at 13,255.74. Eight of the 10 main sectors were higher.

It lost about 5 percent of its value in the seven sessions leading into Thursday.

Cockfield noted the index is currently holding with significant support above the 40-week and 50-week moving averages.

Sino-Forest TRE.TO rose for a second day, gaining 4.7 percent to C$5.15 following a short-seller’s damning report last week that crushed the Chinese forest plantation company’s stock. [ID:nN09122513]

“It’s unfortunately a speculative trade right now until you get a clearer sense of who’s right and who’s wrong,” said Barry Schwartz, vice-president and portfolio manager at Baskin Financial Services.

Investors will be watching Canadian jobs data for May on Friday morning, but Schwartz said domestic numbers will not be as market-moving as data from the United States, Canada’s largest trading partner.

“It should be no surprise to anybody that the U.S. economy is growing at a snail’s pace, it should be no surprise to anybody that Greece is going to go bankrupt, and it should be no surprise to anybody that it’s a complete mess in the United States when it comes to the deficit and the fights between the Republicans and the Democrats,” added Schwartz.

“That being said, corporate profits are at such an extremely high level and stock markets are at such a low level that buying stocks here of companies that have a good balance sheet, big dividends, surprising earnings, gives you a significant margin of safety given how low interest rates are.”

$1=$0.97 Canadian Reporting by Claire Sibonney; editing by Rob Wilson

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