Canadian stocks rose for a second day, led by energy producers, after oil prices climbed and concerns eased that a suit against Goldman Sachs Group Inc. signaled tougher regulation and slower growth.
Canadian Oil Sands Trust gained 2.2 percent as oil added 1.9 percent after European airspace began reopening, restoring some demand for jet fuel, after flights were halted by a volcanic eruption in Iceland. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer, advanced 1.5 percent on analyst comments.
The Standard & Poor’s/TSX Composite Index rose 10.56 points, or 0.1 percent, to 12,113.53. The S&P/TSX slipped from an 18-month high last week after the U.S. Securities and Exchange Commission sued Goldman Sachs, claiming fraud and misrepresentation.
“This whole nonsense has blown over,” said Terry Shaunessy, president of Shaunessy Investment Counsel in Calgary, which manages C$200 million ($200 million), referring to the Goldman Sachs case. “Meanwhile, the picture’s getting brighter -- just get long.”
The S&P/TSX has climbed 9 percent since Feb. 8 as oil has jumped 16 percent and copper 21 percent on optimism about an economic recovery. Energy and raw materials companies make up 45 percent of Canadian stocks by market value.
Oil futures advanced for the first time in four days.
Canadian Oil Sands, the largest owner of the Syncrude project, climbed 2.2 percent to C$30.49. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, rose 1.4 percent to C$78.08. Talisman Energy Inc., which has operations in North America, the North Sea and Indonesia, gained 4 percent to C$17.33 after analyst Greg Pardy of Royal Bank of Canada told clients in a note the stock was “oversold.”
Vero Energy Inc., which produces gas and oil in western Canada, surged 10 percent to C$6.98 after saying production has exceeded the company’s forecast.
Another western Canadian energy producer, Daylight Resources Trust, led the S&P/TSX with a 5.1 percent jump to C$10.99 after releasing drilling results. Canaccord Financial Inc. analyst Kyle Preston called the results of Daylight’s operations in the Cardium formation of Alberta “impressive.”
Gas and electricity marketer Just Energy Income Fund increased 3.6 percent to C$13.96 after announcing it will buy Hudson Parent Holdings LLC and Hudson Energy Corp. of Texas. Just Energy will pay about C$330 million for Hudson and issue the same amount in debt that can be converted into stock to finance the transaction.
Potash Corp. advanced 1.5 percent to C$110.05 after Soleil Securities Corp. analyst Mark Gulley raised his rating on the stock to “hold” from “sell.” Gulley told clients Potash Corp. is better valued now that its shares have declined. The shares have lost 15 percent since March 16. Also, analyst Elaine Yip of Credit Suisse Group AG said she recommends “that investors take advantage of the recent weakness in the fertilizer sector.”
Agrium Inc., the second-biggest fertilizer producer in Canada, rallied 2.1 percent to C$64.61.
Extendicare Real Estate Investment Trust, which owns 258 senior-care centers in North America, plunged 9.7 percent to C$8.94 after saying it has received subpoenas from the U.S. Department of Health and Human Services’ inspector general. The subpoenas relate to a U.S. government investigation of claims that may violate the Social Security Act. The company said it isn’t aware of any improper claims and will cooperate fully with the probe.
The Canadian dollar soared the most since November after the Bank of Canada signaled it may raise interest rates as early as June 1.
Vehicle maker Bombardier Inc., which says its earnings decline with a stronger Canadian dollar, increased 4.6 percent to C$5.52. The economic optimism the Bank of Canada expressed in its announcement today outweighs the impact of the rising currency, Shaunessy said.
To contact the reporters on this story: Matt Walcoff in Toronto at firstname.lastname@example.org