June 23, 2008 / 1:09 PM / 11 years ago

Strong resources, BCE boost Toronto stocks

TORONTO (Reuters) - The Toronto Stock Exchange’s main index kicked off the week by surging higher on Monday, buoyed by firm oil prices and a jump by BCE Inc after Canada’s top court backed the buyout of the telecom company.

People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch

However, late in the day sources said the banks funding the BCE buyout have asked for significant concessions and have considered altering or dropping the C$34.8 billion ($34.3 billion) deal.

BCE stock eased from its intraday highs to close up C$1.98, or 5.7 percent, at C$36.58 on a volume of nearly 30 million shares.

Resource issues underpinned the benchmark’s rise, while the price of oil climbed as concerns over supply eclipsed Saudi Arabia’s promise to raise output.

“The commodities are continuing to do well,” said Paul Harris, portfolio manager at Avenue Investment Management in Toronto.

“I don’t think they’re going up as aggressively as they were previously, but I think they will continue to do well for many of the reasons people keep talking about, such as low supply and good demand.”

The S&P/TSX composite index closed up 111.15 points, or 0.76 percent, at 14,691.82 with six of its 10 main sectors on the upside.

The energy and materials sectors rose 2.8 percent and 1.8 percent respectively. Suncor Energy was up C$3.16, or 5.1 percent, at C$64.98, while in the materials group, Potash Corp of Saskatchewan gained C$6.24, or 2.7 percent, to


In the mining space, HudBay Minerals will buy Skye Resources for about C$437 million to get possession of the Fenix nickel project in Guatemala, the companies said.

HudBay finished down 78 Canadian cents, or 5.3 percent, at C$14.01, while Skye put on 97 Canadian cents, or 12.6 percent, to C$8.69.

On the downside, financials gave up 1.7 percent, with Canadian Imperial Bank of Commerce falling after an analyst forecast the bank would have to write off at least C$1 billion in the current quarter due to exposure to bond insurers.

CIBC ended down C$1.03, or 1.7 percent, at C$60.60. Also in the sector, Royal Bank of Canada lost C$1.37, or 2.9 percent, to C$46.23.

Analysts said they expect to see more writedowns continue to plague financials both in Canada and globally.

“You can make the argument that Canada is perhaps not in as bad a shape overall. But, nevertheless, I think it’s more of an international problem than one that’s very particular to the United States,” said Levente Mady, a broker at MF Global Canada in Vancouver.

Market volume was 378 million shares worth C$8 billion. Decliners outpaced advancers 833 to 756. The blue chip S&P/TSX 60 index closed up 7.15 points, or 0.82 percent, at 877.70.

In New York, stocks were little changed in quiet trade as jitters over problems among financial issues offset advances in the energy sector.

The Dow Jones industrial average was flat, ending down 0.33 of a point at 11,842.36, while the Nasdaq composite index dipped 20.35 points, or 0.85 percent, to 2,385.74.

($1=$1.02 Canadian)

Editing by Rob Wilson

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