July 23, 2010 / 7:20 PM / 9 years ago

CANADA STOCKS-TSX bounces back up on commodities, earnings

* TSX up 43.87 points at 11,711.63

* Materials, energy, bank shares all higher (Updates to afternoon)

By Claire Sibonney

TORONTO, July 23 (Reuters) - Toronto’s main stock index climbed back up Friday afternoon in volatile trading as commodity prices strengthened and a fresh batch of solid North American earnings boosted sentiment.

Copper rallied to a two-month high, helped by fund buying and with gains undisturbed, as investors digested results of European bank stress tests, pushing base-metal mining stocks up 1.4 percent. [MET/L] [ID:nN23155614]

Teck Resources TCKb.TO jumped 1.6 percent to C$37.00, while First Quantum Minerals (FM.TO) gained 1.2 percent to C$67.58.

“China is now taking more of a growth stance over an inflation concern stance right now, which to us is much more meaningful in the short term than whether the European sovereign crisis is going to result into anything,” said Rick Meslin, head of Canadian equities at UBS Securities Canada.

“That’s a constructive market as far as I’m concerned, especially in Canada, where materials are such an emphasis.”

The investor mood also benefited from a new round of solid corporate results, including Verizon Communications Inc. (VZ.N), and a dividend hike by General Electric Co. (GE.N).

On the domestic earnings front, Canadian National Railway (CNR.TO) rose 1.6 percent to C$64.72 after it reported a 38 percent leap in quarterly profit on Thursday and raised its full-year forecast. [ID:nN22122933]

“(Earnings) have been very positive for the market ... There’s been a smaller set of Canadian numbers, but the CN Rail numbers have caught attention and have been positive for the market,” said Fergal Smith, managing market strategist at Action Economics.

At 2:34 p.m. (1834 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 43.87 points, or 0.4 percent, at 11,711.63.

Heavily-weighted financial shares gained 0.5 percent as Royal Bank of Canada (RY.TO) added 0.3 percent to C$52.13 and Bank of Montreal (BMO.TO) rose 1.4 percent to C$61.94.

Also on the plus side for riskier assets, data showed Britain’s economy grew almost twice as fast as expected in the second quarter and German business sentiment leaped by a record margin in July. [ID:nLDE66M0RN] [ID:nLDE66M0JV]

“Over the last few days, sentiment is turning to the positive, as these big events like the sovereign debt crisis and China crisis ... become just a little more manageable,” added Meslin.

As well, U.S. crude oil futures briefly turned higher in late trading on Friday as Wall Street rose, sending energy shares up 0.2 percent. [O/R]

Among the decliners, contract electronics manufacturer Celestica Inc. (CLS.TO) slid 3.7 percent to C$9.08 after reporting a quarterly net loss, hurt by higher restructuring charges. [ID:nSGE66M0EC]. That helped drag the technology sector down 1 percent.

In other company news, Magna International MGa.TO rose 1 percent to C$77.55 after the auto parts maker announced that three-quarters of its subordinate shareholders approved a deal that would pay founder Frank Stronach upward of $1 billion to effectively give up control of the company. [ID:nN23121319]

$1=$1.04 Canadian Reporting by Claire Sibonney; Editing by Paul Simao

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