Canadian Stocks Gain as Energy, Raw-Materials Shares Advance

Canadian stocks advanced to a three- week high, led by energy and raw-materials producers, as fuels and metals gained on analyst reports speculating that prices will rebound.

Suncor Energy Inc. (SU), Canada’s largest oil and gas company, increased 2 percent after a drop in U.S. distillate-fuel inventories. Potash Corp. of Saskatchewan Inc., the world’s No. 1 fertilizer producer, rose 2.6 percent as investors speculated wet weather will delay U.S. planting. Teck Resources Ltd. (TCK/B), Canada’s biggest base-metal producer, climbed 2.5 percent after Deutsche Bank AG said copper will rise to an average of $11,500 a metric ton in 2012 from about $9,483 this year.

The Standard & Poor’s/TSX Composite Index advanced 156.35 points, or 1.2 percent, to 13,751.47, the highest close since May 2. The index fell 0.4 percent yesterday, breaking a five-day streak of gains.

“There’s not much going on in the bounce-back in commodities except the bullish reports from some saying they think they got oversold in recent weeks,” said Danielle Park, a partner at Venable Park Investment Counsel Inc. in Barrie, Ontario, which manages at least C$1 million ($1.02 million) each for more than 250 families. “It’s just traders hoping to get back in some momentum in those sectors.”

The Canadian stock benchmark fell 4.7 percent from April 5 to yesterday as commodities including oil, copper, corn and wheat dropped. Energy and raw-materials companies make up 48 percent of Canadian stocks by market value. Commodities have declined as economic data reflected a slowing global recovery, the European debt crisis intensified and investors speculated emerging-market countries may raise interest rates.

Hot Weather

Crude oil rose to a two-week high after the U.S. Energy Department said inventories of distillates, such as heating oil and diesel fuel, fell by 2.04 million barrels last week. The decline exceeded all 14 estimates in a Bloomberg survey of analysts.

Suncor gained 2 percent to C$40.37. Talisman Energy Inc. (TLM), an oil and gas producer with operations in North America, the North Sea and Indonesia, advanced 2.7 percent to C$20.35. Encana Corp. (ECA), Canada’s biggest natural gas producer, increased 2.6 percent to C$33.34 as that fuel climbed.

Cinch Energy Corp. (CNH), which explores for oil and gas in western Canada, soared a record 39 percent to C$1.76 after agreeing to be bought by Tourmaline Oil Corp. (TOU) in a deal Tourmaline valued at about C$205 million ($210 million). Tourmaline fell 2.5 percent from a record close to C$28.27.

Agricultural Futures

Agricultural futures rose as storms in the central U.S. threatened to extend planting delays, boosting prices of corn and wheat. Potash prices will continue to rise in the second half of the year, Patricio de Solminihac, deputy general manager of Soc. Quimica y Minera de Chile SA, said in a conference call.

Potash Corp. gained 2.6 percent to C$53.10. Agrium Inc. (AGU), Canada’s second-largest fertilizer producer, advanced 3.5 percent, the most since December, to C$82.06.

Copper climbed 2.3 percent after Deutsche Bank followed similar comments from Goldman Sachs Group Inc. and JPMorgan Chase & Co. in saying prices are likely to rebound.

Inmet Mining Corp., which produces base metals in Europe, increased 2.8 percent to C$69.21. Northern Dynasty Minerals Ltd. (NDM), Anglo American Plc’s partner in the Pebble project in Alaska, rallied 8 percent to C$12.19. Teck Resources rose 2.5 percent to C$48.40.

Cameco Climbs

Cameco Corp. (CCO), the world’s largest uranium producer, climbed 4.1 percent to C$27.77 after Financial Times Deutschland said Germany may drop a five-month-old tax on nuclear fuel. Government spokesman Steffen Seibert said no decision has been made on the tax.

Gold gained for a fourth day, and silver surged 4.2 percent.

Barrick Gold Corp. (ABX), the world’s largest producer of the metal, advanced 1 percent to C$46.10. Silver Wheaton Corp. (SLW), Canada’s fourth-largest precious-metals company by market value, climbed for a sixth day, increasing 2.9 percent to C$35.83. Harry Winston Diamond Corp. (HW), the owner of the Diavik mine featured on the TV show “Ice Road Truckers,” jumped 5.4 percent to C$16.75.

The six largest S&P/TSX banks each rose after Bank of Montreal (BMO) reported earnings that topped the average analyst estimate and Fitch said German banks’ potential losses from Greece are manageable.

BMO, Canada’s fourth-largest bank, gained 0.9 percent to C$62.05 after topping the average of 14 analyst estimates by 2.4 percent, excluding certain items. Toronto-Dominion Bank (TD), the country’s second-biggest lender by assets, advanced 1.8 percent to C$85.29 before releasing second-quarter financial results. Sun Life Financial Inc. (SLF), Canada’s third-biggest insurer, increased 0.8 percent to C$29.85.

Westport Innovations Inc. (WPT), which develops natural-gas engines, rallied 5.9 percent to C$24.76. The shares have soared 17 percent since May 16, the day before it said it will develop fuel-system technologies with Caterpillar Inc.

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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