August 29, 2011 / 9:05 PM / 7 years ago

CANADA STOCKS-Energy, banks lead TSX to 1-wk high in broad rally

 * TSX up 177.34 points, or 1.44 pct, at 12,504.85
 * Energy, financials drive gains
 * Gold miners fall 1.52 percent, sliding with gold prices  (Adds analyst comment, updates to close)
 By Trish Nixon
 TORONTO, Aug 29 (Reuters) - Toronto’s main stock index advanced to a one-week high on Monday in a broad rally led by energy and financial companies, as positive U.S. and European news boosted investor appetite for riskier assets.
 World stocks rallied along with oil after a merger between two major banks in Greece gave investors a rare bit of encouraging news out of Europe. [MKTS/GLOB]
 An unexpected surge in U.S. consumer spending for July — which indicated the economy was not falling back into recession further boosted sentiment. [ID:N1E77S0BS]
 “It’s a dim light, but still a light at the end of the tunnel,” said Serge Pepin, head of investments at BMO Investments Inc. “Investors and market participants want to cling to those positive numbers.”
 All of the market’s 10 main groups were stronger, with energy stocks leading the way, up 2.6 percent. Canadian Natural Resources (CNQ.TO) was the most heavily weighted climber, jumping 3.47 percent to C$36.05.
 The heavyweight financial sector added 1.5 percent, with Bank of Nova Scotia (BNS.TO) climbing 2 percent to C$52.35 ahead of its quarterly results, announced on Tuesday. Manulife Financial (MFC.TO), up 4.6 percent at C$13.29, was another top gainer.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE close up 177.34 points, or 1.44 percent, at 12,504.85. Earlier it reached a session high of 12,523.92, its strongest since Aug. 18.
 Monday’s rally added to gains from Friday’s session, when markets started to embrace riskier assets after a speech from U.S. Federal Reserve Chairman Ben Bernanke left the door open for fresh stimulus for the U.S. economy.  [nN1E77R0GB]
 “Investors feel that there’s a little bit more breathing room from what the Fed had to say on Friday,” Pepin added. “We know that the Fed and the central banks are staying vigilant.”
 Gold miners, down 1.52 percent as bullion prices tumbled, held back the TSX, causing the index to underperform its U.S. counterparts. [GOL/][.N]
 Among the biggest decliners, Barrick Gold (ABX.TO) lost 1.9 percent to C$49, and Goldcorp (G.TO) fell 1.3 percent to C$50.30.
 AuRico Gold AUQ.TO was the third heaviest laggard, plunging more than 19 percent to C$11.05 after the company said it will buy Northgate Minerals NGX.TO for C$1.46 billion to create an intermediate-sized gold company. [nL4E7JT1Q9]
 ($1=$.98 Canadian)  (Editing by Jeffrey Hodgson)                  

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