* TSX up 8.81 points at 13,443.22, led by miners
* Index puts in best December in 5 years
* TSX up 14.4 percent for 2010 (Updates to close, adds details, commentary)
By Claire Sibonney
TORONTO, Dec 31 (Reuters) - Toronto’s main stock index pushed higher on Friday in sparse New Year’s Eve trade, as strong metal prices and a rally by miners kept the market on track for its best December in five years and double-digit growth in 2010.
The index was up 3.8 percent for the month and 14.4 percent for the year, touching its highest level since August 2008 in the previous session.
On the day, materials gained 0.7 percent as copper capped 2010 with a run of records and the price of gold notched its 10th annual gain. Spot silver also had a standout year, the second best performer among precious metals after palladium. [MET/L] [GOL/]
Silver Wheaton SLW.TO jumped 3 percent to C$38.98, while Barrick Gold Corp (ABX.TO) firmed almost 1 percent to C$53.12 and Teck Resources TCKb.TO rallied 1.4 percent to C$61.79.
Financials ended up 0.1 percent, but mostly offset by energy shares which closed 0.1 percent down.
In individual company news, Baffinland Iron Mines BIM.TO climbed 3.6 percent to C$1.43 after steel giant ArcelorMittal ISPA.AS raised its bid to C$550 million, or C$1.40 a share, in pursuit of the miner’s vast undeveloped iron ore deposit in the Arctic. [ID:nLDE6BU0GO]
Shares of Imax Corp IMX.TO surged 4.3 percent to C$28.04 on a report that Sony Corp (6758.T) or Walt Disney (DIS.N) might be interested taking it over. [ID:nN31136169]
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished the last trading day of the year up 8.81 points, or 0.07 percent, at 13,443.22. The index is up more than 20 percent from lows seen in February and July.
“Everyone’s gotten a lot more comfortable that the global economy really is in a sustained rebound,” said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri. “It’s not too surprising that commodities led the way as growth expectations really ratcheted up in the last few months.”
The year’s decent performance was better than many had expected.
“It was a year where you actually had a double-digit return, which I think would have been a surprise to everybody at the beginning of this year, if only because last year was so strong,” said Gavin Graham, president of Graham Investment Strategy.
Last year the TSX rebounded from one of its worst years ever in 2008, rising 31 percent — its strongest performance since 1979.
Looking to 2011, observers are optimistic that solid global growth and corporate earnings will deliver a healthy market, but expect more volatility.
Joe Ismail, technical analyst at Maison Placements Canada in Edmonton, Alberta, said the next critical resistance level to breach is around 13,800 — an area last seen in mid-2008, when the 10-week and 40-week moving averages crossed.
He said that move would establish a new bullish trend in the market that would make way for an all-time high for the TSX in the range of 15,500 to 16,000 points in the second half of next year.
“The first week of January you’re going to see some buying power coming in because it’s going to be a new year, everybody is padding up their portfolio a little bit and they’re going to push the market to positive territory,” he said.
Risks are plentiful however — from monetary tightening in emerging markets to sovereign debt worries in the euro zone and a depleting arsenal of stimulus measures in the United States.
BEST AND WORST OF 2010
The year’s best performing sector on the TSX was the small healthcare group, which soared 40 percent — propelled by Biovail Corp’s $3.3 billion merger with U.S.-based Valeant Pharmaceuticals (VRX.TO). However, the sector makes up less than 1 percent of the index.
The materials group, home to gold and base-metal miners and fertilizer producers, shot up 36 percent, boosted by record metal prices and China’s stunning demand prospects.
Consumer discretionary issues came in third, advancing 22 percent, as better than expected spending boosted retailers.
Lagging the overall market performance however were the energy group, which rose 9 percent, and financials, which added only 4 percent.
While U.S. crude futures ended 2010 above $91 a barrel, up 15 percent for the year, the energy sector took a hit from weak natural gas futures, which skidded 21 percent.
“Earnings have been very strong, especially on the resource side where you came back from the depression-era prices that people were seeing in 2009, and that is 50 percent of the Canadian stock market,” added Graham. “Also you had pretty good numbers out of the banks and financials.”
Canadian banks, touted as the world’s soundest through the financial crisis, had a fine year, with the notable exception of Royal Bank of Canada (RY.TO), the index’s most heavily weighted stock, which lost 7 percent due to disappointing results and problems with its U.S. operations.
Insurance companies, which are particularly sensitive to low interest rates and soft returns on equity markets, were hard hit but have since rebounded.
($1=$1 Canadian) (Reporting by Claire Sibonney; editing by Rob Wilson)