Canadian Stocks Rally a Fifth Day as Materials Companies Advance
Canadian stocks (SPTSX) rose for a fifth day, the longest winning streak since August, as gold’s four-day rally spurred gains in raw-material producers.
Iamgold Corp. (IMG), which mines in West Africa, South America and Quebec, advanced 4.3 percent as tension increased between Western nations and Iran over the country’s threat to block the Strait of Hormuz. Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by value, lost 1.3 percent as natural gas and oil futures dropped. First Quantum Minerals Ltd. (FM) rallied 4.4 percent after settling an African legal dispute.
The Standard & Poor’s/TSX Composite Index (SPTSX) climbed 10.93 points, or 0.1 percent, to 12,237.40.
“Gold is still in a long-term uptrend,” said Robert “Hap” Sneddon, president of money manager CastleMoore Inc. in Oakville, Ontario, and president of the Canadian Society of Technical Analysts. “People have been waiting for any sort of correction or stability from $1,900 down to start to pick away. When people look at gold producers at this level, people say the risk/reward is pretty good if we get back to those record highs.”
The index has gained 4.3 percent in the last five days as raw-materials and energy stocks advanced after economic data in the U.S., Europe and China surpassed economists’ forecasts. The two industries make up 48 percent of Canadian equities by market value, according to data compiled by Bloomberg. The S&P/TSX tumbled 11 percent in 2011 on concern the European debt crisis will limit global growth.
Gold futures extended their streak of advances to the longest in 10 weeks after U.K. Defense Secretary Philip Hammond said the country may take military action against Iran if it blocks the Strait of Hormuz.
Iamgold increased 4.3 percent to C$17.48. Osisko Mining Corp., which produces gold in Quebec, climbed 3.4 percent to C$10.39. Gabriel Resources Ltd. (GBU), which is developing a gold project in Romania, rebounded 8.5 percent to C$6.67 after sinking 7 percent yesterday.
Oil futures retreated on the New York Mercantile Exchange after settling at the highest price since May yesterday. Natural gas fell to the lowest settlement price since September 2009.
Canadian Natural decreased 1.3 percent to C$39.34. Crescent Point Energy Corp. (CPG), a western Canadian oil and gas producer, slipped 1.5 percent to C$45.43. Talisman Energy Inc. (TLM), an oil and gas company with operations in North America, the North Sea and Indonesia, dropped 1.6 percent to C$13.41.
Enbridge, First Quantum
Enbridge Inc. (ENB), Canada’s largest pipeline company, gained 1.6 percent to C$37.89. In a note to clients dated yesterday, Matthew Akman, an analyst at Bank of Nova Scotia (BNS), raised his 12- month price estimate on the shares to C$42 from C$40, writing that Enbridge’s expansion may lead to faster growth than the company has forecast.
Artek Exploration Ltd. (RTK), an energy producer with operations in Canada, surged 27 percent, the most since September 2009, to C$2.90 after selling some assets in Alberta for C$19.5 million ($19.1 million).
First Quantum jumped 4.4 percent to C$21.98. Eurasian Natural Resources Corp. agreed to acquire the company’s assets in the Democratic Republic of Congo for $1.25 billion, ending a legal dispute between the two over the Kolwezi copper project.
Potash Corp. of Saskatchewan Inc. (POT), the world’s biggest fertilizer producer by market value, advanced 1.2 percent to C$43.96 after Plymouth, Minnesota-based peer Mosaic Co. said it expects record global potash shipments in 2012.
Coal producer Cline Mining Corp. (CMK) soared 21 percent, the most since May 2010, to C$2.07 after saying it won regulatory approval to mine the Blue Seam at its New Elk coal property in Colorado.
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