Canadian stocks rose for the second day as France and Germany expressed support for Greece, offsetting a report on U.S. retail sales that signaled the world’s largest economy may slow.
Suncor Energy Inc. (SU) and Cenovus Energy Inc. (CVE) climbed 3.1 percent and 3.5 percent respectively. Silvercorp Metals Inc. (SVM) rallied 4.3 percent after an analyst said the miner will weather fraud allegations. BCE Inc. (BCE), Canada’s largest phone company, climbed 1.7 percent as telecom companies rose.
The S&P/TSX increased 87.9 points, or 0.7 percent, to 12,293.38 at 4 p.m. Toronto time. The gauge advanced 0.5 percent yesterday, ending a three-day losing streak.
“We’ve built a base, a gradual -- albeit volatile -- up channel in the major markets,” said Andrew Pyle, who helps manage C$200 million ($202 million) as an associate money manager at Bank of Nova Scotia (BNS)’s ScotiaMcLeod unit in Peterborough, Ontario. “This market is still vulnerable to concrete negative news,” he said. “Retail sales came in flat and the market was looking for a modest gain.”
Concern the global economy was slipping back into a recession amid a worsening sovereign-debt crisis in Europe triggered an 18 percent plunge in the S&P/TSX between the beginning of April and Aug. 8. The index has rebounded 5.3 percent since then through yesterday.
Support for Greece
French President Nicolas Sarkozy and German Chancellor Angela Merkel are “convinced” Greece will remain in the euro area, according to a statement issued by Sarkozy after they spoke to Greek Prime Minister George Papandreou by telephone today. The Greek government said in its own statement it is determined to carry out all budget plans.
Caijing reported on its website today, citing Zhang Xiaoqiang, a vice chairman of the National Development and Reform Commission, that China is willing to buy the bonds of European nations hit by the debt crisis.
Canadian stocks briefly turned lower today after a report showed American retail sales unexpectedly stalled in August as a lack of jobs restrained shoppers. The unchanged reading followed a 0.3 percent gain for July that was smaller than previously estimated, Commerce Department figures showed today in Washington. The median forecast of 83 economists surveyed by Bloomberg News was a 0.2 percent rise.
While oil futures slipped today, Canadian energy companies gained. Suncor Energy, Canada’s biggest fuel producer, advanced 3.1 percent to C$29.44. Cenovus Energy rose 3.5 percent to C$33.02.
‘Weather This Storm’
Silvercorp Metals gained 4.3 percent to C$6.46. Allegations of fraud against the Chinese silver miner are “unfortunate and opportunistic,” said Brad Humphrey, an analyst at Raymond James Ltd. He said he expects the Vancouver-based company to “weather this storm.”
The Chinese miner, which was accused of fraud in an anonymous letter last month, rejected another report that questioned the quality of the company’s ore and volume of sales to a related party. The report was published yesterday by Alfredlittle.com, a website that posts research on companies doing business in China. Silvercorp, which plunged 20 percent yesterday, denied the report’s findings and posted documents today on its website that it said disprove the allegations.
Telecommunication stocks posted the second-biggest gain out of 10 groups in the S&P/TSX today, adding 2.5 percent. BCE rose 1.7 percent to C$38.71. Telus Corp. (T) jumped 3.3 percent to C$52.37.
Bank of Nova Scotia gained 0.2 percent to C$51.55. Canada’s third-largest lender by assets replaced Royal Bank of Canada (RY), the largest lender, as UBS’s “key call” in the country’s bank industry. Royal Bank of Canada lost 0.6 percent to C$45.99.
Barrick Gold Corp. (ABX), the world’s largest gold producer, slipped 1.1 percent to C$52.16. The Toronto-based company will complete a $550 million upgrade of its two gold mines in Peru by 2013, the company’s country manager Darrell Wagner said. The plan will expand the Alto Chicama mine and extend the operating life of the Pierina mine, both in the northern Andes, Wagner said at a conference in the city of Arequipa, Peru.
To contact the reporter on this story: Inyoung Hwang in New York at email@example.com
To contact the editor responsible for this story: Nick Baker at firstname.lastname@example.org