Canadian Stocks Rise as Europeans Take Steps to Address Crisis
Canadian stocks rose, paring a second straight weekly decline, after Italy’s Senate approved debt-reduction measures that helped reduce concern worldwide that the debt crisis is intensifying.
Barrick Gold Corp. (ABX), the world’s biggest producer of the metal, rallied 3.3 percent as the U.S. dollar retreated. Suncor Energy Inc. (SU), the country’s biggest oil and gas producer, climbed 2.4 percent as crude headed for its sixth straight weekly increase. Royal Bank of Canada (RY), the country’s largest lender by assets, advanced 1.1 percent as Italian bond yields fell for a second day.
The Standard & Poor’s/TSX Composite Index rose 167.98 points, or 1.4 percent, to 12,276.85, reducing its weekly drop to 1.1 percent.
“The other day, when markets plunged, there was hysterical talk that Italy had ‘crossed the brink,’” David Baskin, president of Baskin Financial Services Inc. in Toronto, said in a telephone interview. The firm oversees about C$400 million ($394 million). “The Italians are taking the crisis seriously. The end of the world isn’t here yet, and we can all stop thinking that a catastrophe has happened.”
The S&P/TSX retreated this week, plunging 2.7 percent on Nov. 9, as financial and energy stocks fell amid concern the spread of Europe’s debt crisis to Italy may weaken the global economy. The two industries make up 54 percent of Canadian stocks by market value, according to Bloomberg data.
Italy’s Senate approved a package of budget measures promised to the European Union, two days after yields on the nation’s 10-year debt surpassed 7 percent for the first time since the euro was introduced. The other house of Italy’s parliament, the Chamber of Deputies, will pass the legislation tomorrow, Chamber Speaker Gianfranco Fini said. Prime Minister Silvio Berlusconi has agreed to step down in favor of former EU Competition Commissioner Mario Monti after the bill is passed.
Greek President Karolos Papoulias swore in a national unity government led by Lucas Papademos, a former vice president of the European Central Bank. The country’s main political parties agreed to work together to secure funds to avert an economic collapse.
Gold futures completed their third straight weekly increase as the U.S. dollar fell against all 16 other major currencies. Barrick climbed 3.3 percent to C$53.72. Goldcorp Inc. (G), the world’s second-largest producer of the metal by market value, rose 4.4 percent to C$54.58. Aurizon Mines Ltd. (ARZ), which operates in Quebec, rallied 7.1 percent to C$6.31.
Aura Minerals Inc. (ORA), which develops gold and base-metals projects in Latin America, plunged 19 percent, the most since December 2008, to C$1.30 after cutting resource estimates at its Sao Francisco and Sao Vicente mines in Brazil. Tanzanian Royalty Exploration Corp. (TNX), which tumbled 33 percent yesterday as Geier Group LLC sold its stake in the company, rebounded 24 percent to C$2.84.
Crude futures rose on the New York Mercantile Exchange to cap a sixth straight week of gains, the longest streak since April 2009. Suncor climbed 2.4 percent to C$32.36. Canadian Natural Resources Ltd. (CNQ), Canada’s second-largest energy company by market value, advanced 1.5 percent to C$37.68.
TransCanada Corp. (TRP), the pipeline company planning to build a line from Alberta to the Gulf of Mexico, increased 2.4 percent to C$40.81 after slumping 6 percent, the most in a four-day period since June 2009, this week through yesterday. At least five analysts maintained “buy” ratings on the company the day after the U.S. said it would delay a decision on the Keystone XL pipeline.
Legacy Oil & Gas Inc. surged 9.2 percent, the most in 11 months, to C$9.59 after reporting an increase in cash flow. “Current production levels support that Legacy is back on the growth trajectory,” Matthew Taylor, an analyst at National Bank of Canada, said in a note to clients.
The six largest S&P/TSX banks each gained. Royal Bank advanced 1.1 percent to C$45.65. Toronto-Dominion Bank (TD), its largest domestic rival, increased 0.7 percent to C$72.40.
Brookfield Asset Management Inc., Canada’s biggest real estate company, climbed 2.2 percent to C$29.14 after reporting third-quarter profit that beat the average analyst estimate in a Bloomberg survey by 55 percent, excluding certain items.
Base-metals producers in the S&P/TSX advanced as copper futures broke a five-day losing streak. Teck Resources Ltd. (TCK/B), Canada’s largest base-metals and coal company, rose 1.5 percent to C$38.31. First Quantum Minerals Ltd. (FM), the country’s second- biggest publicly traded copper producer, gained 4.2 percent to C$18.97 after losing 21 percent in the prior two days.
Trucking company TransForce Inc. (TFI) jumped 7.4 percent to C$13.29. It agreed to buy I.E. Miller Services Inc., a Eunice, Louisiana-based company that relocates oil and gas rigs for about $110 million. The purchase of the business from Complete Production Services Inc. will add about $138 million to TransForce’s annual revenue, the Montreal-based company said in a statement.
BlackBerry maker Research In Motion Ltd. (RIM) climbed 4.6 percent to C$18.69 after closing at the lowest since January 2004 yesterday. Omega Advisors Inc. disclosed yesterday that it bought 1.43 million shares of the company in the third quarter.
WestFire Energy Ltd. (WFE), a western Canadian oil and gas producer, surged 19 percent, the most since it began trading in December 2009, to C$5.20, after saying production at its Viking property last quarter surpassed its estimates.
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