*TSX up 0.27 percent to 12,136.07
*Energy, materials lead index higher
By Claire Sibonney
TORONTO, April 20 (Reuters) - Toronto’s main stock index was higher on Tuesday morning as a slew of strong U.S. company results boosted market risk appetite and commodity prices gained.
The index’s energy sector was up 0.9 percent as oil rose past $82 a barrel after Goldman Sachs (GS.N) reported stunningly strong earnings and as some European flights resumed after the threat from volcanic ash in Iceland receded.
The grounding of flights due to the ash cloud had pushed down oil prices as had uncertainty surrounding the Goldman charges. [O/R] [ID:nN20251740]
“We were due for some type of pullback and I certainly thought that the combination for the Goldman potential fine and air traffic brought to a halt in Europe would be the catalyst but it’s not the case,” said Barry Schwartz, vice-president and portfolio manager at Baskin Financial Services.
“This just tells us this market still has legs. It’s just shrugging off any bad news and it’s focusing on really good earnings and improving economic data.”
Schwartz added there was little reaction to the Bank of Canada becoming the first Group of Seven country to signal it will raise interest rates, perhaps as early as June 1, as the economy recovers faster than expected. [ID:nN20257669]
“This is priced in...this is the bottom of the cycle and our generation will never see low interest rates like this again.”
At 10:20 a.m. (1420 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 33.10 points, or 0.27 percent, at 12,136.07. Seven of its 10 sectors were higher.
Its materials group was 0.2 percent higher as base metal prices benefited from the renewed investor optimism. [MET/L]
Teck Resources TCKb.TO, the country’s biggest base-metals miner, gained 1.6 percent to C$43.08, while First Quantum Minerals (FM.TO) rallied 3.1 percent to C$82.46.
Gold producers, however, lagged the price of the metal as investors saw waning momentum to take shares higher.
“A good economy usually means bad news for gold. Gold should be insurance against calamity and we’ve turned the corner there so it’s hard to see the catalyst take gold higher,” Schwartz said.
“I guess as a hedge against U.S. dollar weakness it should do okay but we prefer to put our clients into things that have more upside.”
$1=$1.00 Canadian Reporting by Claire Sibonney, editing by Peter Galloway