Canadian Stocks Rise as Banks Gain After Europe Concerns Ease

Canadian stocks rose for the first time in three days as energy and financial shares gained after European leaders moved to prevent their debt-crisis strategy from unraveling.

Suncor Energy Inc. (SU) increased 2.8 percent as crude oil climbed for the first time in four days after Greek Prime Minister George Papandreou was summoned to a Group of 20 meeting to hear there is no alternative to budget cuts. Barrick Gold Corp. (ABX), the world’s largest producer of the metal, gained 1.7 percent as the U.S. Dollar Index declined from a three-week high. Bank of Nova Scotia (BNS), the country’s third-largest lender by assets, advanced 1.6 percent.

The Standard & Poor’s/TSX Composite Index rose 126.66 points, or 1.1 percent, to 12,241.76. The index fell 3.2 percent over the previous two days as Papandreou said he will subject his country’s bailout plan to a referendum.

“The shock and awe from the Greek decision to do a referendum had its moment in the sun, and now the market has digested that and is looking beyond it,” Gerry Brockelsby, a money manager at Marquest Asset Management Inc. in Toronto, said in a telephone interview. The firm oversees about C$250 million ($246 million). “We’re in the final throes here of a resolution.”

The S&P/TSX has dropped 14 percent since April 5 as base metals and financial shares have declined in part on concern Europe’s debt crisis will weaken the global economy. Energy, raw-materials and financial companies make up 76 percent of Canadian stocks by market value, according to Bloomberg data.

‘Only Way’

Papandreou, whose country is not a G-20 member, will attend the group’s meeting that begins in Cannes, France, tomorrow. Among the other leaders in attendance will be French President Nicolas Sarkozy, who said yesterday the bailout strategy crafted last week is the “only way to resolve Greek debt problems.”

Canada’s benchmark stock gauge gained as much as 1.7 percent today before the U.S. Federal Open Market Committee released a policy statement that didn’t include a new round of asset purchases.

The S&P/TSX Energy Index rebounded from the lowest close since Oct. 20. Suncor climbed 2.8 percent to C$31.79. Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by market value, rose 2.9 percent to C$34.98.

Western Canadian oil and gas producer Trilogy Energy Corp. (TET) surged 5.6 percent to C$34.66 after at least five analysts raised their share-price estimates.

Shale-Gas Development

Bank of Montreal’s Gordon Tait, who increased his estimate to C$36 from C$30, cited “continued positive results” from the company’s operations in the Kaybob area of Alberta and the “increasing potential” of its Duvernay shale-gas development.

Enerflex Ltd., which provides products and services to the energy industry, jumped 5.8 percent to C$10.61 after saying it won a contract worth about $228 million for a gas-processing plant in Oman.

Gold stocks in the S&P/TSX advanced to the highest close since Sept. 22. Barrick increased 1.7 percent to C$51.18. Goldcorp Inc. (G), the world’s second-biggest company in the industry by market value, climbed 2.8 percent to C$51.35. Eldorado Gold Corp. (ELD), Canada’s fifth-largest gold company by market value, gained 2.9 percent to C$19.85.

Wesdome Gold Mines Ltd. (WDO), which operates in Ontario, tumbled 19 percent, the most since October 2008, to C$2.08 after saying third-quarter production and sales trailed its forecasts.

Base Metals

All 15 companies in the S&P/TSX Diversified Metals & Mining Index rose. Teck Resources Ltd. (TCK/B), Canada’s largest base-metals and coal producer, increased 2.8 percent to C$39.05. First Quantum Minerals Ltd. (FM), the country’s second-largest publicly traded copper producer, advanced 3.2 percent to C$20.50. Lundin Mining Corp., which produces base metals in Europe, rallied 5.9 percent to C$3.96.

Potash Corp. of Saskatchewan Inc. rebounded 1.9 percent to C$47.45 after sinking 7.7 percent in the previous three days. Potash prices will rise next year due to low inventories and historically high corn futures, P.J. Juvekar, an analyst at Citigroup Inc., wrote in a note to clients.

Financial companies in the S&P/TSX climbed for the first time in four days. Scotiabank advanced 1.6 percent to C$51.97. Toronto-Dominion Bank (TD), the country’s second-largest lender by assets, rose 0.8 percent to C$73.41. Brookfield Asset Management Inc. (BAM/A), Canada’s biggest real-estate company, gained 2.2 percent to C$29.05.

Industrial Alliance Insurance and Financial Services Inc. sank a record 11 percent to C$28.76 after reporting third- quarter earnings that trailed the average analyst estimate in a Bloomberg survey by 31 percent, excluding certain items.

Electronic-whiteboard maker Smart Technologies Inc. (SMA) rallied 15 percent, the most since its July 2010 initial public offering, to C$4.14 a day before the scheduled release of its second-quarter financial results. The company said yesterday it won a contract for about 1,300 whiteboards and cameras from the Lubbock, Texas, school district.

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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