* Main index up 70.07 pts, or 0.6 pct, to 12,535.51
* Tentative trading as Europe deal optimism fades
* Materials, gold miners drive early rise (Adds further analyst comment, details)
By Jon Cook
TORONTO, Oct 28 (Reuters) - Canadian stocks edged higher in early action on Friday, led by a rise in shares of gold and base metal miners, even as fading optimism over a European debt deal weighed on the broader market.
Trading was somewhat tentative a day after the TSX jumped more than 2 percent on investor optimism following the euro zone’s latest debt crisis plan.
“They (Europe) kicked the can down the road. But it’s a very short road and it looks like we’re going to be revisiting a lot of the problems so gold stocks have been benefiting,” said John Ing, president of Maison Placements Canada.
“Precious metals have been and remain the place to hide.”
The materials sector and gold miners were the biggest early drivers. With gold on track for its best weekly gain in two months, the Canadian gold mining sector rose 1.7 percent. [GOL/]
Barrick Gold (ABX.TO) led the sector and broader market higher, jumping 3.1 percent to C$50.11. Goldcorp Inc (G.TO) rose 3.3 percent to C$49.37.
At 11:31 a.m. (1531 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 70.07 points, or 0.6 percent, to 12,535.51. It touched a session high of 12,541.84, its strongest level since Sept. 9.
By contrast, U.S. and European stocks fell as investors booked profits after the prior session’s strong rally and a disappointing Italian debt auction showed investor confidence in Europe remained shaky despite the latest rescue deal. [MKTS/GLOB]
Despite European leaders drafting a plan to tackle the region’s debt crisis, investors had hoped for more concrete details on how the agreement specifically addresses lenders with Greek debt holdings and bank recapitalization.
Still, some analysts said the progress was enough for investors to focus more closely on company fundamentals.
“As we remove this sword of Damocles from Europe that means that securities selection and earnings analysis can shine through,” said Stephen Wood, chief investment strategist for North America at Russell Investments in New York.
In other news, shares of base metal miner Inmet IMN.TO jumped more than 7 percent on Friday. The company said talks with parties interested in buying a stake in its Cobre Panama copper project in Central America are continuing and that there has been no dip in interest despite current global economic concerns. [ID:nN1E79R0NU]
Markets paid little heed to U.S. government data showing consumer income grew by a sluggish 0.1 percent in September, and a separate report showing wages and salaries expanded 0.3 percent in the third quarter — the smallest rise in a year. (Editing by Jeffrey Hodgson)