Canadian Stocks Rise as EU Loan Eases Default Concerns; Royal Bank Jumps
Canadian stocks rose for the first time in six days after European finance ministers agreed to an almost $1 trillion loan package in an attempt to stop the sovereign-debt crisis from further weakening the euro.
Toronto-Dominion Bank, the country’s second-biggest bank, increased 2.6 percent as financial companies jumped. Teck Resources Ltd., the country’s largest base-metals producer, surged 8.8 percent as copper rallied the most in six weeks. Suncor Energy Inc., Canada’s largest oil and gas company, gained 2.3 percent as crude futures advanced the most intraday in seven months.
The Standard & Poor’s/TSX Composite Index climbed 255.47 points, or 2.2 percent, to 11,947.90 for the biggest gain since Dec. 1.
“There were a lot of people shorting this market,” said Chyanne Fickes, vice president of investments at Stone Asset Management in Toronto, which manages C$810 million ($790 million). “The underlying economic issues in North America appear to be really improving a lot, and the basic shutdown of Europe taken off the table -- that is a big concern if you’re short.”
The S&P/TSX dropped 4.2 percent last week, the most since July, after a 110 billion-euro European Union-International Monetary Fund bailout package for Greece failed to stem investors’ concern over budget deficits on the continent.
$1 Trillion Package
The finance chiefs of countries that use the euro agreed to the almost $1 trillion package and a program of bond purchases after a 14-hour meeting overnight. The loans would be funded from European governments, the EU and the IMF.
Bond yields in the most-heavily indebted countries that use the euro currency retreated, indicating investors feel default is less likely. The yield on the benchmark Greek two-year government bond plunged to 7.5 percent from 18.3 percent May 7. The Canadian dollar gained 1.9 percent against the U.S. dollar, the most in 11 months.
Oil futures rose 2.3 percent to $76.80 a barrel after tumbling 13 percent last week, while natural gas climbed 3.9 percent.
An index of energy companies rallied 2.5 percent, the most in five weeks.
Suncor, Pacific Rubiales
Suncor increased 2.3 percent to C$32.64. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, climbed 2.8 percent to C$73.98. Pacific Rubiales Energy Corp., which produces heavy oil in Colombia, soared 9.7 percent, the most since July, to C$21.08.
S&P/TSX financial stocks rebounded from a two-month low. TD rallied 2.6 percent to C$73.77. Royal Bank of Canada, the country’s largest bank, rose 2 percent to C$60.10 to contribute the most to the S&P/TSX’s gain. Manulife Financial Corp., the country’s largest insurer, gained 2.6 percent to C$18.60.
Producers of metals used in industry advanced on the promise of economic recovery. Teck increased 8.8 percent, the most in nine months, to C$39.53. First Quantum Minerals Ltd., Canada’s second-largest copper producer, climbed 5.7 percent to C$73.46 after losing 11 percent last week. Consolidated Thompson Iron Mines Ltd. rallied 10 percent to C$8.93.
Canadian National Railway Co., Canada’s largest railroad, surged 4.4 percent, the most in 13 months, to C$60.73, as transportation stocks rose across North America. Canadian Pacific Railway Ltd., the country’s other Class I railroad, gained 5 percent to C$59.25.
ShawCor Ltd., which provides products and services to the energy industry, fell 4.8 percent, the most among S&P/TSX companies, to C$27.22. The company reported first-quarter earnings that missed the average analyst estimate by 61 percent, excluding certain items.