April 16, 2008 / 9:32 PM / 11 years ago

UPDATE 4-Toronto stocks vault sharply higher on resources

(Adds details, quotes)

By Leah Schnurr

TORONTO, April 16 (Reuters) - The Toronto Stock Exchange’s main index closed at its highest level in more than five months on Wednesday, buoyed by rising resources and big gains by fertilizer companies after a surge in the price of potash exports to China.

Potash Corp of Saskatchewan POT.TO and Agrium AGU.TO helped yank the index higher after Chinese importers agreed to pay more than triple what they did a year ago to reserve potash supplies.

Potash Corp jumped C$10.35, or 5.5 percent, to C$198.50, while Agrium climbed C$6.20, or 7.7 percent, to C$86.70. Both companies are part of Canpotex, a joint marketing venture, along with Mosaic (MOS.N), which exports potash produced by all three in Saskatchewan.

The S&P/TSX composite .GSPTSE closed up 248.53 points, or 1.79 percent, at 14,099.48 with eight of its 10 main sectors higher. It was the TSX’s highest close since early November.

Gold producers helped propel the benchmark higher as bullion rallied amid the U.S. dollar’s descent. Barrick Gold (ABX.TO) gained C$1.72, or 3.9 percent, to C$46.12, and Kinross Gold (K.TO) added C$1.30, or 5.4 percent, to C$25.48.

Overall, the materials group pushed up 4 percent, while its gold producer subindex rose 3.5 percent.

The heavyweight energy sector added 1.6 percent, lifted by continuing highs in oil prices. Crude settled up $1.14 at $114.93 a barrel after earlier pushing through $115.

Imperial Oil (IMO.TO) rose C$2.27, or 4 percent, to C$59.06, and Suncor Energy (SU.TO) added C$2.26, or 2 percent, to C$114.38.

The index has been moving with increasing confidence since late March, but Michael Sprung, president at Sprung & Co. Investment Counsel, cautioned that he expects to see more downturns in the summer.

“There’s certainly going to be some more bad news coming from the financial sector in the U.S. and I think globally the credit situation is not going to go away.”

“The recent uptick in the market could be looked at as something of a bear trap,” Sprung said. “People are getting lulled in, thinking the worst is behind us, and I wouldn’t be so quick to come to that conclusion.”

The financials sector was spurred higher on Wednesday, gaining 1.3 percent, while Canadian Imperial Bank of Commerce (CM.TO) rose C$1.99, or 3 percent, to C$67.81, and Royal Bank of Canada (RY.TO) was up C$1.04, or 2.3 percent, at C$46.87.

The tech sector pushed up 1.5 percent after Intel (INTC.O) reported revenue that was slightly better than expected and affirmed its profit-margin target for the year.

Intel’s results, along with some other U.S. blue chips, also helped dispel some of the gloom over the outlook for earnings season that was stoked by results from bellwether General Electric (GE.N) last week.

Shares of of Adanac Molybdenum AUA.TO rose 33 Canadian cents, or 55.9 percent, to 92 Canadian cents after it said it had secured $80 million in bridge financing to advance development at its Ruby Creek molybdenum project.

Market volume was 410 million shares worth C$7.7 billion. Advancers outpaced decliners 960 to 657. The blue chip S&P/TSX 60 index .TSE60 closed up 15.79 points, or 1.93 percent, at 832.61.

In New York, stocks also soared amid reassuring earnings, as the Dow Jones industrial average .DJI ran up 256.80 points, or 2.08 percent, to 12,619.27. The Nasdaq Composite Index .IXIC closed up 64.07 points, or 2.8 percent, at 2,350.11.

$1=$1.00 Canadian Editing by Peter Galloway

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