Canadian stocks rose, breaking a three-day losing streak for the Standard & Poor’s/TSX Composite Index, as oil gained and financial companies rallied amid easing concern about French banks.
Toronto-Dominion Bank, Canada’s second-largest lender by assets, increased 1.7 percent. Bank of Nova Scotia, the third- largest lender, added 1.3 percent. Cenovus Energy Inc. (CVE) rose 1.9 percent as crude climbed for a second day. Silvercorp Metals Inc. (SVM), the Chinese silver miner accused of accounting fraud in an anonymous letter last month, fell 20 percent after Carson Block’s Muddy Waters LLC said it was shorting the stock.
The S&P/TSX rose 56.65 points, or 0.5 percent, to 12,205.48 at 4 p.m. Toronto time. The gauge lost 4.5 percent during the previous three days.
“We have a daily risk-on, risk-off trade as the market responds to global news,” Mathieu Roy, a money manager at Louisbourg Investments Inc. in Moncton, New Brunswick, said in a telephone interview. Louisbourg manages about C$1.5 billion ($1.5 billion). “We’re in a nervous trading range driven by macro events happening mostly in Europe.”
The index has slumped 14 percent since April 5 as the European debt crisis worsened. On Sept. 9, three officials with German Chancellor Angela Merkel’s coalition said the government is preparing plans to shore up banks in the event that Greece defaults. The officials declined to be named because the deliberations are private.
Toronto-Dominion Bank jumped 1.7 percent to C$73.85, while Bank of Nova Scotia (BNS) surged 1.3 percent to C$51.45. Royal Bank of Canada (RY), the country’s largest lender by assets, rose 0.1 percent to C$46.25. The S&P/TSX Financials Index advanced 0.8 percent while industrial stocks added the most among 10 industries, gaining 1.6 percent.
BNP Paribas SA, France’s biggest bank, and Societe Generale (GLE) SA rebounded in Paris trading after easing concerns over their access to funding. Societe Generale jumped after Chief Executive Officer Frederic Oudea said in an interview with Bloomberg Television in New York that the bank’s exposure to European sovereign debt was “manageable” and that it could do without access to U.S. money-market funds.
Cenovus, the country’s fifth-biggest energy company, rallied 1.9 percent to C$31.90. Encana Corp. (ECA), Canada’s biggest natural gas producer, advanced 1.5 percent to C$22.68.
Crude climbed for a second day in New York on speculation a report tomorrow will show stockpiles dropped in the U.S., the biggest oil consuming country. Natural gas futures gained for the first time in three days as forecasts showed hotter-than- normal weather in the U.S. Midwest and West, boosting demand for the power-plant fuel.
Guyana Goldfields Inc. (GUY) rallied 1.3 percent to C$9.30. The gold explorer with operations in South America was rated “outperform” in new coverage at Credit Suisse Group AG with a price estimate of C$13 a share.
Silvercorp fell 20 percent, the most in seven years, to C$6.20. Lorne Waldman, a spokesman for Vancouver-based Silvercorp, didn’t respond to e-mail and telephone requests for comment. Block of Muddy Waters announced his bearish Silvercorp bet on Twitter today.
Toronto-Dominion Bank (TD) reduced its forecast for the Canada’s economic growth this year and next to reflect a U.S. economy that had a deeper recession than previously reported, according to Craig Alexander, the bank’s chief economist.
TD cut its growth forecast for Canada to 2.2 percent this year, from 2.8 percent. It reduced the forecast for next year to 1.9 percent, from 2.5 percent, and raised the 2013 outlook to 2.6 percent, from 2.1 percent.
To contact the reporter on this story: Nikolaj Gammeltoft in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Nick Baker at email@example.com