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Canadian Stocks Rise as U.S. Manufacturing Activity Advances

Canadian stocks rose, trimming a weekly decline, as energy producers gained after data from the U.S. indicated expansion in manufacturing and improving consumer confidence.

Canadian Natural Resources Ltd. (CNQ), the country’s second- biggest energy company by market value, climbed 1.5 percent as crude oil rallied. Iamgold Corp. (IMG), which produces gold in Africa and South America, lost 5.2 percent after agreeing to sell its stake in two Ghanian mines. Osisko Mining Corp. (OSK), which explores for gold in Quebec, increased 3.5 percent after Credit Suisse Group AG boosted its rating on the shares.

The Standard & Poor’s/TSX Composite Index gained 41.65 points, or 0.3 percent, to 13,863.45 at 10:37 a.m. in Toronto. The equity benchmark pared its decline this week to 2.4 percent after four straight weeks of gains.

“Those consumer-confidence numbers are looking good. The economy’s looking strong,” said Gerry Brockelsby, who helps oversee more than C$200 million ($208 million) as a money manager at Marquest Asset Management Inc. in Toronto. “The market is focused on the fundamentals of the economy, and it’s getting better.”

The index had surged 17 percent in the year ending last week as oil and copper rallied on demand from China and other emerging markets. China is the world’s largest user of base metals and second-biggest oil consumer behind the U.S. Energy and raw-materials companies make up 50 percent of Canadian stocks by market value.

U.S. Manufacturing

U.S. industrial production rose 0.8 percent in March, the Federal Reserve reported. Economists had forecast a gain of 0.6 percent, according to the median estimate of 82 economists in a Bloomberg survey.

The Federal Reserve Bank of New York’s index of manufacturing in New York and parts of New Jersey and Connecticut, advanced to 21.7 from 17.5 last month, exceeding all 55 economist forecasts in a Bloomberg survey.

Stocks extended their rally after the Thomson Reuters/University of Michigan preliminary index of U.S. consumer sentiment advanced to 69.6 from 67.5 in March. The figure surpassed most estimates in a Bloomberg survey of economists.

Canadian Natural climbed for the first time this week, increasing 1.5 percent to C$43.20. Enbridge Inc. (ENB), Canada’s largest pipeline company, rose for a fourth day, gaining 1.2 percent to C$60.80. Oilfield-services provider Precision Drilling Corp. (PD) advanced 3.2 percent to C$14.10.

Inflation

Precious-metals producers climbed after China and the euro region reported higher inflation than most economists had forecast and Moody’s Investors Service cut Ireland’s credit rating by two levels.

Goldcorp Inc. (G), the world’s second-largest gold producer by market value, gained 1.2 percent to C$52.47. Silver Wheaton Corp. (SLW), which resells silver mined by other companies, increased 2 percent to C$41.95.

Osisko Mining Corp., which is developing a gold project in Quebec, rallied 3.5 percent to C$13.46 after Alex Terentiew, an analyst at Credit Suisse, raised his rating on the shares to “outperform” from “neutral.” Terentiew has a share-price estimate of C$17 on the shares, which had fallen 18 percent from November to yesterday.

Iamgold lost 5.2 percent to C$20.01 after agreeing to sell its interests in the Tarkwa and Damang mines to Gold Fields Ltd. for $667 million. The company, based in Toronto, is selling minority stakes in assets to raise funds to buy majority interests.

Political Unrest

Semafo Inc. (SMF), a gold mining company that generated 69 percent of its revenue in Burkina Faso last year, slumped 5.8 percent to C$7.99 after the African country’s presidential guard mutinied. Shares of the Saint-Laurent, Quebec-based company plunged as much as 16 percent earlier today, touching an eight- month low of C$7.16.

South American Silver Corp. (SAC), which explores for metals in South America, soared 18 percent to C$2.46 after saying its Malku Khota project isn’t among those that Bolivia might expropriate. The shares had tumbled 22 percent yesterday after Bolivian President Evo Morales announced plans to undo mine privatization.

BlackBerry maker Research In Motion Ltd. (RIM) gained 2.3 percent from a five-month low to C$52.73. In a note to clients, Tim Long, an analyst at Bank of Montreal, said RIM’s PlayBook tablet computer “will prove to be a very strong product” for business users.

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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