Canadian Stocks Rise as Gold Shares Advance on Stimulus Outlook

Canadian stocks rose for a sixth day as commodity producers gained after U.S. Federal Reserve Chairman Ben S. Bernanke said the Fed may increase its asset-purchasing program.

Silver reseller Silver Wheaton Corp. (SLW) advanced 4.8 percent as gold and silver climbed for a sixth day. Canadian Natural Resources Ltd. (CNQ), the country’s second-biggest energy company by market value, rallied 2.6 percent after an analyst at Stifel Financial Corp. raised his rating on the shares. Royal Bank of Canada (RY), the country’s largest lender by assets, lost 1.2 percent after at least seven analysts cut their share-price estimates on the company.

The Standard & Poor’s/TSX Composite Index (SPTSX) rose 97.06 points, or 0.7 percent, to 13,276.01. The index’s six-day streak of advances is the longest in three months. Bernanke said the Fed may expand bond purchases beyond the $600 billion announced last month to spur growth, in what would be a third stage of a policy known as quantitative easing.

“There’s more and more inflows into commodities, and at the same time, it’s pushing commodity stocks higher,” said Stephen Gauthier, who helps manage C$500 million ($496 million) at Fin-XO Securities in Montreal. “We heard about QE3 on the weekend. If jobs are not created fast enough, they’ll have to invent new things. Liquidities will be thrown into the markets, and that will help gold.”

The index gained 2.2 percent last week, the most in three months, as a weaker U.S. dollar propelled the Thomson Reuters/Jefferies CRB Commodity Price Index to its biggest weekly gain since October 2009. Energy and raw-materials companies make up 49 percent of Canadian stocks by market value.

Long Recovery

Gold increased 0.7 percent to a record and silver jumped 1.6 percent today, a day after Bernanke told the U.S. TV program “60 Minutes” that it may take four or five years for the country to return to an unemployment rate of 5 percent or 6 percent. The U.S. jobless rate climbed to 9.8 percent last month from 9.6 percent in October, the Labor Department said Dec. 3 in Washington.

An index of S&P/TSX raw-materials companies roses for a fifth day, extending a record.

Silver Wheaton gained 4.8 percent to C$41.27. Barrick Gold Corp. (ABX), the world’s largest gold producer, increased 1.9 percent to C$55.25. NovaGold Resources Inc. (NG), which is developing gold and base-metals projects in Alaska and British Columbia, rose 8.7 percent to C$16.30.

Canaco Resources Inc., which explores for gold in Africa, surged 12 percent to C$5.27 after announcing what it called “spectacular new drill results” from a project in Tanzania. Shares of the Vancouver-based company have soared nearly 11-fold over the past eight months.

Coal Miners

Teck Resources Ltd. (TCK/B), Canada’s largest base-metals and coal producer, climbed 3.4 percent to C$56.72. SouthGobi Resources Ltd. (SGQ), which mines coal in Mongolia, jumped 15 percent to C$13.94 after signing its largest sales contract in company history.

Rare Element Resources Ltd. (RES), which is developing a rare-earths project in Wyoming, soared 14 percent to C$11.20 after Nikkei English News reported Sumitomo Corp. may buy a stake in rare-earths producer Molycorp Inc.

Canadian Natural increased 2.6 percent to C$42.95 after Amir Arif, an analyst at Stifel, boosted his rating on the shares to “buy” from “hold.” In a note to clients, Arif cited the company’s fiscal discipline and potential benefits from higher oil prices.

‘Perplexing’

Corridor Resources Inc. (CDH), which explores for oil and gas in Eastern Canada, plunged 33 percent, the most in nine years, to C$5.19 after reporting two shale-gas wells found no gas and “negligible” gas, respectively. The company called the results “unexpected and perplexing.”

Rodinia Oil Corp., which looks for oil and gas in Australia, surged 23 percent to C$2 after receiving an “outperform” rating in new coverage from Nathan Piper, an analyst at Royal Bank. The shares have doubled since the company’s May initial public offering.

The S&P/TSX Banks Index retreated for a third day after Royal Bank and Toronto-Dominion Bank reported fourth-quarter earnings that missed their average analyst estimates last week.

Royal Bank decreased 1.2 percent to C$52.62. TD, Canada’s second-largest lender by assets, fell 1.9 percent to C$70.86. Bank of Nova Scotia (BNS), the No. 3 bank, gained 0.9 percent to C$56.12 after Sumit Malhotra, an analyst at Macquarie Group Ltd., raised his rating on the stock to “outperform” from “neutral.”

To contact the reporter on this story; Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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