Canadian Stocks Advance After Global Manufacturing Data Improve

Canadian stocks (SPTSX) rose the most since Nov. 30 as oil and metals gained after indexes of U.S., U.K. and Chinese manufacturing surpassed most economist forecasts and German unemployment fell to a 20-year low.

Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, increased 5.5 percent as crude futures advanced after Iran said it produced its first nuclear fuel rod. Barrick Gold Corp. (ABX), the world’s biggest gold producer, climbed 4.5 percent as the U.S. Dollar Index declined the most in a month. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, rallied 5.1 percent after an analyst at Susquehanna Financial Group raised his rating (POT) on the shares.

The Standard & Poor’s/TSX Composite Index (SPTSX) rose 253.34 points, or 2.1 percent, to 12,208.43, the highest close since Nov. 15.

“Manufacturing globally looks like it’s picking up,” Jennifer Radman, a money manager at Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($991 million). “As we get more comfortable the world isn’t going to fall apart, investors will increasingly be tolerant of taking on more risk in their portfolios.”

Canada’s benchmark index retreated 11 percent (SPTSX) in 2011, led by raw-materials and energy producers, on concern the European debt crisis will hamper global growth. The two industries make up 47 percent of Canadian stocks (SPTSX) by market value, according to Bloomberg data.

The Institute for Supply Management’s U.S. manufacturing index advanced to 53.9 in December from 52.7 the previous month, the Tempe, Arizona-based organization said today. Economists had forecast an increase to 53.5, according to the median estimate in a Bloomberg survey.

German Unemployment

The euro gained today after Germany said unemployment (GRUEPR) dropped to 6.8 percent last month, the lowest since at least 1991, from 6.9 percent in November. Most economists in a Bloomberg survey had forecast no change.

U.K. and Chinese purchasing managers’ indexes exceeded most economists’ estimates in Bloomberg surveys as well. The factory index for China indicated expansion, while all 15 surveyed economists had forecast a second-straight month of contraction.

Stocks extended their advances after the U.S. Federal Reserve said some members of its Federal Open Market Committee “indicated that current and prospective economic conditions could well warrant additional policy accommodation” at their Dec. 13 meeting.

Crude oil rallied to the highest settlement price since May on the New York Mercantile Exchange. Suncor gained 5.5 percent to C$31. Canadian Natural Resources Ltd. (CNQ), the country’s second- largest energy company by market value, rose 4.5 percent to C$39.86. Oil-sands developer BlackPearl Resources Inc. (PXX) surged 9.5 percent to C$4.50.

Vero Energy Jumps

Vero Energy Inc. (VRO), a western Canadian oil and gas producer, soared a record 27 percent to C$2.65 after saying it will sell some assets for C$209 million.

Gold futures advanced the most in 10 weeks on the Comex in New York. Barrick increased 4.5 percent to C$48.13. Kinross Gold Corp. (K), Canada’s third-largest gold producer by market value, climbed 6.8 percent, the most since May 2010, to C$12.42. Banro Corp., which explores for gold in Africa, jumped 10 percent to C$4.17.

Base-metals and coal producers (STDIVM) in the S&P/TSX gained as copper futures advanced for a third day. Teck Resources Ltd. (TCK/B), Canada’s largest company in the industry, increased 6.9 percent to C$38.37. First Quantum Minerals Ltd. (FM), the country’s second- biggest publicly traded copper producer, rose 4.4 percent to C$20.94. Lundin Mining Corp. (LUN), which produces base metals in Europe, surged 9 percent to C$4.22.

Potash Corp. Gains

Potash Corp. gained 5.1 percent to C$44.26 after Don Carson, an analyst at Susquehanna, boosted his rating on the shares to “positive” from “neutral.” “We see strong grower demand this coming spring based on our expectation of increased corn acreage planted in the U.S.,” Carson wrote in a note to clients.

Agrium Inc. (AGU), a fertilizer producer and farm retailer, rallied 5.5 percent to C$72.11 as corn futures climbed to the highest since November on the Chicago Board of Trade.

The S&P/TSX Financial Index (STFINL) advanced to a two-month high. Royal Bank of Canada (RY), the country’s largest lender by assets, rose 1.6 percent to C$52.82. Bank of Nova Scotia (BNS), Canada’s third-biggest lender, increased 1.5 percent to C$51.59. Manulife Financial Corp. (MFC), North America’s fourth-largest insurer, climbed 3.2 percent to C$11.20.

BlackBerry maker Research In Motion Ltd. (RIM) rallied 5.9 percent to C$15.67 after the Financial Post said the company “is preparing to unveil a corporate shakeup.” Barbara Stymiest, a former TMX Group Inc. chief executive officer and current RIM board member, “is believed to be the leading candidate” to replace co-chairmen Jim Balsillie and Mike Lazaridis as head of the board, the Toronto-based newspaper said, citing unnamed sources familiar with the matter.

RIM shares plunged a record 75 percent in 2011.

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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