October 6, 2011 / 2:53 PM / 7 years ago

CANADA STOCKS-TSX rises more than 1 pct as Ivanhoe surges

 * TSX up 160.19 points, or 1.4 pct, at 11,617.41
 * Nine of 10 sectors higher
 * Ivanhoe-Rio Tinto certainty sends shares higher  (Adds detail, analyst comment)
 By Andrea Hopkins and Ashleigh Patterson
 TORONTO, Oct 6 (Reuters) - Toronto’s main stock index rose more than one percent on Thursday as certainty over the Ivanhoe-Rio Tinto massive copper-gold project in Mongolia drove the resource-heavy index higher for the second straight day.
 The heavyweight materials sector, which includes gold and base metal miners, surged 2.9 percent in early trade as shares in Canadian miner Ivanhoe Mines (IVN.TO) soared more than 17 percent in the wake of news that its Oyu Tolgoi project will go ahead unchanged. [IVN.TO]
 Toronto stocks also benefited as the European Central Bank took steps to pump more cash into the euro zone banking system in a bid to contain the region’s debt crisis, though uncertainty remained. [MKTS/GLOB]
 “A number of people are not sure whether yesterday was a fake-out or the real McCoy,” said Irwin Michael, portfolio manager at ABC Funds.
 Toronto stocks gained 2.5 percent on Wednesday after three days of losses as commodities rallied and U.S. economic data came in better than expected.
 Michael said there was little certainty among investors as to which way market sentiment would head in the near term.
 “Any news that comes up, if it is good, it brings the market up a bit more, it emboldens people a bit, and if there is negativity, people say we kind of expected it, and let’s wait and see. So it’s a tug of war right now.”
 At 10:26 a.m. (1426 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 160.19 points, or 1.4 percent, at 11,617.41.
 Nine of 10 sectors were higher, led by a 2.9 percent surge in the materials sectors and a 2 percent rise in the energy sub-index.
 Potash Corp POT.TO led the gainers, up 4.1 percent to C$48.45, followed by Suncor Energy (SU.TO), up 2.4 percent at C$28.17.
 But the big story was Ivanhoe, whose shares surged more than 17 percent after the Mongolian government, Ivanhoe and Rio Tinto agreed to back a 2009 investment agreement for the Oyu Tolgoi copper-gold deposit, ending discussions over possible changes.
 The 2009 deal gave a 66 percent stake in the multibillion-dollar Oyu Tolgoi project in Mongolia’s South Gobi region to Ivanhoe, in which Rio Tinto (RIO.AX) now owns a 48.5 percent stake.
 The government holds the remaining 34 percent stake in the project and has the right to increase its stake to 50 percent after 30 years. [ID:nL3E7L622F]
($1=$1.05 Canadian)  (Editing by Jeffrey Hodgson)                 

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