Canadian Stocks Advance as Italy’s Berlusconi Plans Resignation

Canadian stocks gained for a second day as banks and base-metals shares rose after Italy’s president said Prime Minister Silvio Berlusconi will resign.

Royal Bank of Canada (RY), the country’s largest lender by assets, advanced 0.9 percent. Barrick Gold Corp. (ABX), the world’s biggest gold producer, fell 1.9 percent as the metal dropped in electronic trading. Teck Resources Ltd. (TCK/B), Canada’s biggest base- metals and coal producer, increased 2.8 percent as copper rebounded after settling on the Comex in New York.

The Standard & Poor’s/TSX Composite Index rose 26.87 points, or 0.2 percent, to 12,488.85.

Berlusconi “has been perceived to be obstructionist with respect to the tougher parts of the austerity program, so him being gone would bring in a caretaker government that could potentially implement the austerity in a way that’s palatable to both the opposition and the governing party,” Bob Decker, a money manager at Aurion Capital Management in Toronto, said in a telephone interview. The firm oversees about C$5.5 billion ($5.5 billion). “The solvency issue is at the heart of the weakness of the markets.”

The S&P/TSX has dropped 12 percent since April 5 as oil has declined 10 percent and copper has sunk 17 percent in part on concern the European debt crisis will weaken the global economy. Energy and raw-materials companies make up 49 percent of Canadian stocks by market value, according to Bloomberg data.

Resignation Plan

Financial stocks rose as Italian President Giorgio Napolitano said Berlusconi will resign after the country’s parliament approves the prime minister’s austerity plans.

Royal Bank gained 0.9 percent to C$46.42. Bank of Nova Scotia, Canada’s third-largest lender by assets, advanced 1.1 percent to C$52.70. Manulife Financial Corp. (MFC), North America’s fourth-biggest insurer, increased 1.8 percent to C$12.77.

Gold stocks in the S&P/TSX retreated from the highest close since Sept. 21 as the metal erased its gains after Napolitano’s statement.

Barrick declined 1.9 percent to C$52.50. Goldcorp Inc. (G), the world’s second-largest gold producer by market value, slipped 1.6 percent to C$53.45. Minefinders Corp. (MFL), which produces precious metals in Mexico, slumped 8.4 percent to C$14.66 after reporting earnings that trailed the average analyst estimate in a Bloomberg survey.

Strategic Metals Ltd. (SMD), which explores for precious metals in Yukon, jumped 23 percent, the most since September 2010, to C$1.79 after Tocqueville Asset Management LP said it acquired 4.3 million shares of Silver Range Resources Ltd. as part of Strategic Metals’ spinoff of Silver Range.

Metals Companies

Base-metals companies in the S&P/TSX advanced to the highest since Sept. 8. Teck increased 2.8 percent to C$40.25. First Quantum Minerals Ltd. (FM), the country’s second-biggest publicly traded copper producer, climbed 4.1 percent to C$22.99. Labrador Iron Ore Royalty Corp. (LIF-U), which owns a stake in Iron Ore Co. of Canada, soared 5.5 percent to C$35.04 after Ike Kaja, an analyst at Salman Partners Inc., raised his earnings forecasts.

Candente Copper Corp. (DNT), which explores in Peru, rallied 24 percent, the most since Jan. 10, to C$1.35. Company President Sean Waller said he did not have an explanation for the surge in a telephone interview.

Crude oil rose for a fifth day to the highest price since July 28. Canadian Natural Resources Ltd. (CNQ), the country’s second- largest energy company by market value, gained 1.6 percent to C$38.55. PetroBakken Energy Ltd. (PBN), a Western Canadian oil and gas producer, advanced 6 percent to C$10.03.

Niko Resources

Niko Resources Ltd. (NKO), which produces oil and gas in South Asia, surged 5.3 percent to C$57.25 after signing a contract with Diamond Offshore Drilling Inc. to explore offshore Indonesia.

Oilfield-services company Gasfrac Energy Services Inc. (GFS) jumped 14 percent to C$9.40 to extend its two-day rally to 34 percent, the most since it began trading in 2008. The company reported third-quarter earnings that doubled the average analyst estimate yesterday, excluding certain items.

Construction company Aecon Group Inc. (ARE) soared 8.2 percent to C$9.94, the highest close since March 23. The company reported third-quarter profit that beat the average analyst estimate in a Bloomberg survey by 33 percent, excluding certain items.

Electronic-whiteboard maker Smart Technologies Inc. (SMA) increased 16 percent to C$5.15. The shares have jumped 56 percent this month as the company said it won a contract for about 1,300 whiteboards from the Lubbock, Texas, school district and reported quarterly profit that, excluding certain items, surpassed its average analyst estimate.

-- With assistance from Christopher Donville in Vancouver, John Lippert in Chicago and Bradley Olson in Houston. Editors: Joanna Ossinger, Jeff Sutherland

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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