March 12, 2010 / 10:22 PM / 9 years ago

CANADA STOCKS-TSX closes above 12,000 on potash, base metals

* TSX rises 34.12 points, or 0.28 percent, to 12,013.82

* Potash stocks lead materials issues, energy weighs

* Index close is highest in nearly 18 months (Adds details, background)

By Cameron French

TORONTO, March 12 (Reuters) - Toronto’s main stock index ended higher on Friday, extending its recent surge, as rising shares of base metal miners and potash producers were offset by weakness among energy and gold issues.

Potash Corp POT.TO, one of the largest resource stocks on the index, shot 6.9 percent higher to C$128.03 after the world’s largest fertilizer maker raised its first-quarter earnings forecast, citing a sharp rebound in demand for the key crop nutrient. [ID:nN11254666]

Agrium AGU.TO, another potash producer, gained 7.5 percent to C$73.42 after it said it was abandoning its $5.4 billion bid for U.S. rival CF Industries (CF.N), ending a takeover attempt that had dragged on for more than a year.

The two stocks helped lead the TSX’s materials sector up 1 percent.

Base metals miners were also stronger, led by Equinox Minerals EQN.TO, which gained 3.3 percent to C$3.75. Gold miners weighed on the sector, including Goldcorp (G.TO), which eased 1.9 percent to C$40.09.

The Toronto Stock Exchange’s key S&P/TSX composite index .GSPTSE rose 34.12 points, or 0.28 percent, to finish at 12,013.82, its highest close in 18 months and its first close above the 12,000 level in the same period.

Half of the 10 TSX subgroups ended the session higher.

The index has risen 8 percent since the beginning of the month, and while the pace of gains eased this week, the market has resisted the urge to retrench.

This suggests a level of investor comfort that could lead to further gains, said Elvis Picardo, strategist at Global Securities in Vancouver.

“The economic numbers have certainly been very positive, but the key thing the market was really spooked about was this whole idea of cascading sovereign risk, starting in Greece,” Picardo said.

“Those fears have really abated.”

Data released on Friday showed that Canada’s unemployment rate fell to 8.2 percent in February from 8.3 percent in January as 20,900 more people found work in the month, which helped confirm the economic recovery is taking hold.

In addition to lifting investor confidence, the news helped pump the Canadian dollar higher.

The currency, which closed at 98.47 U.S. cents, could become a weight on Canadian stocks if it rushes past parity with the greenback, Picardo said, as a stronger Canadian currency typically pinches the country’s exports and hurts economic growth.

A 1 percent drop in crude prices pulled the TSX’s energy subgroup down 0.3 percent, with EnCana Corp (ECA.TO) retreating 1.2 percent to C$34.20 and Paramount Resources (POU.TO) declining 1.7 percent to C$17.80.

$1=$1.02 Canadian Reporting by Cameron French; editing by Rob Wilson

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