TORONTO (Reuters) - Toronto’s main stock market index closed moderately higher on Monday as investors searched for value in beaten-down stocks and gold-mining issues surged with the price of bullion, offsetting weakness in banks.
Safe-haven gold hit a third consecutive all-time high near $1,900 after staging its biggest weekly gain in 2-1/2 years last week, driving the index’s gold-mining sub-group up 4.2 percent.
“It’s a nervous nervous market that we have here, and people are doing the flight to safety thing,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.
“For a change, the gold stocks participated. That has really helped our market.”
Six of the top 10 influential gainers were major gold mining stocks, with Goldcorp (G.TO) leading the way, up 4.8 percent at C$53.65. Barrick Gold (ABX.TO) added 2.6 percent to C$51.64, and Kinross Gold (K.TO) jumped 5.1 percent to C$17.49.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed off its earlier highs, but still up 60.89 points, or 0.51 percent, at 12,068.36. Earlier in the session it climbed as high as 12,218.03.
Seven out of 10 sectors were stronger, with the weighty materials sector driving the gains, up 2.8 percent, and the beaten-down telecommunications group rebounding 1.1 percent.
The gains came after the TSX lost more than 4 percent last week on concerns about a double-dip recession in the United States and the debt crisis in Europe.
“It’s one day at a time,” said Bruce Latimer, trader at Dundee Securities. “We’ve just had such volatility in the last two to three weeks, people will let the market find a bottom rather than try to find the bottom themselves.”
Financial stocks continued to weigh on the market, sinking 0.7 percent. Bank of Nova Scotia (BNS.TO) was the heaviest drag, down 2 percent to C$49.23, while Royal Bank of Canada (RY.TO) fell 1 percent to C$48.48.
“Tenor is sort of set by the European banks, and people are very nervous about them,” Kinsey added.
The cost for euro zone banks to borrow money from one another rose again on Monday, heading back toward their highest levels since late 2008 as U.S. banks remained wary of lending to European counterparts in the face of the intractable debt crisis.
Energy shares also dragged, sliding with the price of oil as investors anticipated a resumption of oil exports from the OPEC-member Libya, where rebels moved to control most of Tripoli and an end to the six-month-old civil war seemed close.
Suncor Energy (SU.TO) was the third most influential decliner, down 1.3 percent to C$28.83.
But positive news helped out some energy producers. Cenovus Energy Inc (CVE.TO) was among the top gainers, adding almost 2 percent to C$32.77. The Alberta-based company said it has started up the third phase of its Christina Lake oil sands project as part of its long-term expansion of steam-driven developments.
Uranium producer Paladin Energy (PDN.AX) PDN.TO said on Monday that it had signed sales agreements with three new customers in the United States, sending its Toronto-listed shares 3.5 percent higher to C$2.05.
Editing by Jeffrey Hodgson