August 24, 2011 / 8:51 PM / 7 years ago

CANADA STOCKS-TSX ekes out gain despite gold selloff

   * TSX ends up 5.48 points, or 0.04 pct, at 12,343.81
 * Banks up 1.5 percent, gold miners off 3 percent  (Updates to close, adds details, quotes)
 By Claire Sibonney
 TORONTO, Aug 24 (Reuters) - Toronto’s main stock index closed a touch higher on Wednesday, managing to recoup earlier losses as optimism over bank earnings, positive U.S. data and hopes for more U.S. stimulus offset tumbling gold prices.
 Financials were the most influential gainers, rising 1.5 percent on surprisingly strong Bank of Montreal (BMO.TO) earnings on Tuesday. It was the first in a wave of bank reports that will be released over the next two weeks.
 Royal Bank of Canada (RY.TO) was up 2.4 percent at C$51.28, Toronto-Dominion Bank (TD.TO) jumped 2.4 percent to C$75.07, and Bank of Nova Scotia (BNS.TO) advanced 1.7 percent to C$52.32.
 “BMO set a pretty high bar yesterday; we’ll see what Royal brings on Friday. We had kind of thought that they would show around 10 percent, but BMO was quite a bit better than that,” said John Kinsey, portfolio manager at Caldwell Securities, noting that U.S. banks were also rebounding.
 “The U.S. banks as a group are very strong, so I guess after getting trashed pretty badly for a long time, somebody’s come in to try and bottom-fish.”
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 5.48 points, or 0.04 percent, at 12,343.81, following Tuesday’s rally of more than 2 percent. Eight of the 10 main groups were stronger, including energy shares, up 0.07 percent.
 Gold miners sank 3 percent as the price of bullion dropped 4 percent on uncertainty ahead of Fed Chairman Ben Bernanke’s speech on Friday, which sparked bullion’s biggest one-day drop in more than two years. [GOL/]
 Barrick Gold Corp (ABX.TO) was the heaviest decliner, down 3.7 percent at C$48.25, followed by Goldcorp Inc (G.TO), which fell 4 percent to C$48.76.
 “The golds are the bad guys today. The commodity really got whacked here ... and that’s affected the gold stocks just when it looked like they were going to catch up to the metal,” added Kinsey.
 John Kurgan, senior market strategist at MF Global Canada, said gold stop-losses over the last couple days built up into an avalanche after the precious metal topped $1,900 an ounce.
  “It’s just selling, selling, selling ... it’s all driven by price, it’s all driven by emotion,” said Kurgan. “We shifted from greed to fear in matter of 48 hours.”
 On the upside, Research In Motion RIM.TO surged nearly 4 percent to C$28.25.
 Helping to boost confidence on the U.S. front, new orders for long-lasting manufactured goods surged in July and the Congressional Budget Office offered an upbeat forecast on the worrisome budget deficits. [ID:nN1E77N096] [ID:nN1E77N0JA]
 The data added further doubts to speculation that Bernanke would announce new stimulus for the U.S. economy at the Jackson Hole, Wyoming, conference of central bankers. That speculation had helped fuel Tuesday’s rally.
 Bernanke is expected to outline gradualist measures, which would disappoint investors looking for a “big bang” approach, such as a fresh round of bond buying. [FED/AHEAD]
  ($1=$0.99 Canadian)  (Reporting by Claire Sibonney)                                        

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