Canadian stocks rose for the first time in four days, led by energy and financial companies, as a German court rejected challenges to Europe’s debt bailout and investors speculated a new stimulus plan will spur U.S. growth.
Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, gained 3.7 percent as crude futures advanced the most in four weeks. Toronto-Dominion Bank (TD), the country’s second-biggest lender by assets, increased 1.4 percent after the Bank of Canada said there is less need to withdraw stimulus. Westport Innovations Inc. (WPT), which develops natural-gas engine technology, soared 18 percent after reaching a marketing agreement with Royal Dutch Shell Plc.
The Standard & Poor’s/TSX Composite Index climbed 202.02 points, or 1.6 percent, to 12,720.56.
“When there’s a bit of better-than-expected news, there’s a bit of a knee-jerk reaction,” Ian Nakamoto, director of research at money manager MacDougall MacDougall & MacTier Inc. in Toronto, said in a telephone interview. The firm oversees $4 billion.
The S&P/TSX dropped 2 percent in the previous three days, including a 0.8 percent drop Sept. 2 after the U.S. said employment didn’t increase in August. Concern over the European debt crisis intensified after German Chancellor Angela Merkel’s party lost a state election. Canada’s stock benchmark has declined 5.4 percent this year.
Germany’s top court today rejected challenges to the country’s participation in bailouts for indebted euro-region governments. Industrial production in the country increased eight times more last month than the median economist forecast in a Bloomberg survey, the Bundesbank said today.
Tax Cuts, Spending
U.S. President Barack Obama is set to lay out plans to Congress tomorrow to inject more than $300 billion into the economy next year, mostly through tax cuts, infrastructure spending and aid to state and local governments.
Oil futures rebounded from a one-week low in New York. Suncor rose 3.7 percent to C$30.36. Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by market value, gained 3.2 percent to C$35.66. Athabasca Oil Sands Corp. (ATH), PetroChina Co.’s partner in Canadian oil-sands development, advanced 5.8 percent to C$13.65. TransGlobe Energy Corp. (TGL), which operates in Egypt and Yemen, jumped 9.8 percent to C$9.91.
Every S&P/TSX bank and the three biggest insurers in the index climbed after the Bank of Canada kept its benchmark interest rate at 1 percent.
“In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished,” the bank said in a statement.
TD increased 1.4 percent to C$77.65. Royal Bank of Canada (RY), the country’s largest lender by assets, rose 1.4 percent to C$48.90. Manulife Financial Corp. (MFC), North America’s fourth- biggest insurer, gained 2.9 percent to C$13.
All 15 companies in an index of S&P/TSX base-metals and coal producer advanced as copper rallied. The metal climbed as Freeport-McMoRan Copper & Gold Inc. faced labor disputes in Peru and Indonesia.
First Quantum Minerals Ltd. (FM), the country’s second-biggest publicly traded copper producer, rose 5.5 percent to C$23.25. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, gained 8.5 percent to C$21.77.
Major Drilling Group International (MDI) Inc., a contract driller, surged 9.6 percent to C$12.65 after reporting first- quarter earnings that beat the average analyst estimate in a Bloomberg survey by 12 percent, excluding certain items. The jump was the biggest since October 2009.
Westport rose 18 percent to a nine-year high of C$26.85. Shell and Westport will jointly offer fuel supply, customer support and maintenance to owners of North American natural-gas vehicles, Shell said in a statement.
Magna International Inc. (MG), Canada’s largest auto-parts maker, rallied 5.2 percent to C$36.98 after Ravi Shanker, an analyst at Morgan Stanley, raised his rating on the shares to “overweight” from “underweight.” Shanker cited share-price declines since Aug. 4 and the company’s “best-in-class” balance sheet. Magna had $1.74 billion of cash and equivalents as of June 30.
Bombardier Inc., the maker of trains and airplanes, rebounded 5.5 percent to C$4.70 after closing at a one-year low yesterday. Boeing Co. raised its 20-year commercial-aircraft- demand forecast for China by 15 percent.
Transcontinental Inc. (TCL/A), Canada’s largest printer, plunged 9.4 percent, the most since March 2009, to C$11.86. The company reported third-quarter earnings that trailed the average analyst estimate in a Bloomberg survey by 9.9 percent, excluding certain items.
Evertz Technologies Ltd. (ET), which makes electronics for broadcasters, soared 12 percent, the most since February 2009, to C$13 after its first-quarter profit surpassed the average analyst estimate in a Bloomberg survey by 19 percent, excluding certain items.
Imax Corp. (IMAX), the maker of giant-screen movie projection systems, surged 9.5 percent to C$18.07. The shares have rallied 30 percent since closing at the lowest relative to earnings since 2000 on Aug. 22.
To contact the reporter on this story: Matt Walcoff at Mwalcoff1@bloomberg.net
To contact the editor responsible for this story: Nick Baker at Nbaker7@bloomberg.net