Royal Bank of Canada (RY), Canada’s largest lender by assets, gained 1 percent as Italian bond yields fell to a five-week low. Suncor Energy Inc. (SU), the country’s biggest energy company, increased 1.4 percent as crude futures advanced. Barrick Gold Corp. (ABX), the world’s largest gold producer, dropped 1.4 percent as the metal declined.
The Standard & Poor’s/TSX Composite Index gained 44.24 points, or 0.4 percent, to 12,119.33.
“Some austerity measures, that’s a good step,” Sadiq S. Adatia, chief investment officer at the asset-management unit of Sun Life Financial Inc., said in a telephone interview from Toronto. The unit oversees about C$3.2 billion ($3.2 billion) for clients. “People are feeling a little more comfortable that things will get done to get this thing over the hump.”
The index rallied the most since July 2009 last week after central banks in Europe, Asia and North America cut lenders’ borrowing costs to bolster the financial system. The S&P/TSX has fluctuated with developments in the European debt crisis this quarter, which has overshadowed growth in Canadian companies’ earnings.
Italian Prime Minister Mario Monti presented his plan to raise taxes and cut spending to Parliament today. German Chancellor Angela Merkel and French President Nicolas Sarkozy met in Paris today to discuss the crisis.
Stocks pared their gains after two officials familiar with the decision said S&P will put all 17 euro nations on review for downgrades pending the result of a Dec. 9 European Union summit.
The S&P/TSX Financials Index advanced after surging 5.2 percent last week. Royal Bank increased 1 percent to C$49.27. Toronto-Dominion Bank (TD), its largest domestic rival, climbed 1 percent to C$73.48. Manulife Financial Corp. (MFC), North America’s fourth-largest insurer, surged 3.8 percent to C$11.63.
Bank of Nova Scotia, Canada’s third-largest lender by assets, fell 1.3 percent to C$48.37 after Mario Mendonca, an analyst at Canaccord Financial Corp., cut his rating on the shares to “hold” from “buy.” Mendonca cited the company’s lowered earnings-growth forecasts.
Energy stocks in the S&P/TSX increased as crude oil climbed for a second day on the New York Mercantile Exchange. Suncor advanced 1.4 percent to C$31.20. Canadian Natural Resources Ltd. (CNQ), the country’s second-biggest energy company by market value, gained 1.5 percent to C$38.33. ShawCor Ltd. (SCL/A), which provides pipeline products and services, rallied 5.3 percent to C$28.11.
Teck, Ivanhoe Mines
Copper settled at a four-week high on the Comex in New York after jumping 9.2 percent last week.
Teck Resources Inc., Canada’s largest base-metals and coal producer, rose 3 percent to C$38.99 for a sixth-straight gain. Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi copper project in Mongolia, surged 5.2 percent to C$21.58 in Toronto Stock Exchange trading. Quadra FNX Mining Ltd. (QUX), which operates in the U.S., Canada and Chile, jumped 6.1 percent to C$11.35.
The S&P/TSX Gold Index dropped for a third day on declining demand for the metal as an alternative asset. Barrick declined 1.4 percent to C$51.15. Goldcorp Inc. (G), the world’s second- biggest producer of the metal by market value, lost 0.9 percent to C$51.84. AuRico Gold Inc., which mines in Mexico, tumbled 5.8 percent to C$9.18.
Industrial stocks in the S&P/TSX advanced the most among the 10 groups in the index, led by railroads. Canadian National Railway Co. (CNR), the country’s largest, increased 1.4 percent to C$79.91. Canadian Pacific Railway Ltd. (CP) climbed 2.5 percent to C$63.85.
Gildan Activewear Inc. (GIL), Canada’s largest apparel maker, advanced 7.3 percent, the most since December 2009, to C$18.61. The shares’ 33 percent plunge on Dec. 1 presents a buying opportunity, Jessy Hayem, an analyst at TD, said in a note to clients. Gildan sank last week after forecasting a first-quarter loss.
Imax Corp. (IMAX), the maker of giant-screen movie-projection systems, surged 11 percent to C$21.83 after Benjamin Mogil, an analyst at Stifel Financial Corp., raised his rating on the shares to “buy” from “hold.” The company is likely to increase its forecast for 2012 screen installations when it reports fourth-quarter earnings in February, Mogil said in a note to clients.
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