Canadian Stocks Rise as Financial Shares Rally on U.S. Jobs Data
Canadian stocks rose for a second day, led by financial and energy companies, as Bank of America Corp. reported a profit and U.S. unemployment claims fell to the lowest level in almost four years.
Bank of Nova Scotia (BNS), Canada’s third-largest bank, gained 2.7 percent after saying it is considering a sale of its Scotia Plaza office tower. PetroBakken Energy Ltd. (PBN) increased 3.1 percent after selling an asset for C$105 million ($104 million). Teck Resources Ltd., Canada’s largest copper producer, rallied 2.9 percent as the metal rose on prospects of stronger demand from China. New Millennium Iron Corp. rallied 20 percent after reporting new drilling results from its Lac Ritchie property.
The S&P/TSX Composite Index (SPTSX) rose 53.17 points, or 0.4 percent, to 12,380.69 today.
“Investors are feeling a little bit more confident in the outlook for the financials,” Michael Sprung, president of Sprung & Co. Investment Counsel Inc. in Toronto, said in a phone interview. “They have been a harbor for the investors.”
The index has climbed 1.2 percent in two weeks as base- metals producers and financial companies gained after Goldman Sachs Group Inc. reported better-than-forecast earnings and copper imports to China rose to a record. The S&P/TSX trailed the S&P 500 last year for the first time since 2003 as drops in commodity prices held back the Canadian stock benchmark gauge.
S&P/TSX banks rose after Bank of America, the second- largest U.S. lender by assets, swung to a fourth-quarter profit and Morgan Stanley reported a smaller fourth-quarter loss than analysts estimated. The U.S. Labor Department reported jobless claims plunged by 50,000 to 352,000 in the week ended Jan. 14, the lowest level since April 2008.
Royal Bank of Canada, the country’s biggest lender by assets, gained 1.2 percent to C$53.10, the highest price since July 22. Toronto-Dominion Bank (TD), the country’s second-largest lender, increased 1.2 percent to C$78.22. National Bank of Canada (NA) gained 2.8 percent to C$75.98, the highest price since July 27.
Bank of Nova Scotia gained 2.7 percent to C$53.98. Canada’s third-largest bank said it is considering a sale of its Scotia Plaza office tower, one of the largest skyscrapers in Toronto’s financial district.
Financial companies comprise 28 percent of Canadian equities by market value, the most of any of 10 industry groups, according to Bloomberg data.
PetroBakken Energy gained 3.1 percent to C$15.44, the highest price since June 7, after selling its interest in the southeast Saskatchewan Weyburn unit to an undisclosed buyer. The shares were raised to “outperform” from “sector perform” at Alta Corp Capital Inc. Petrobank Energy & Resources Ltd. (PBG), the majority owner of PetroBakken, advanced 5.1 percent to C$13.71.
Bankers Petroleum Ltd. (BNK) gained 1.9 percent to C$5.30 after rising as much as 4 percent earlier, after Tudor Pickering said it sees the company as “viable” acquisition target.
Copper increased to a 17-week high in New York on speculation China will ease credit controls as growth slows, potentially bolstering demand prospects in the world’s largest user of the metal. Copper imports into China rose to a record and fourth-quarter economic growth in the country topped economists’ estimates, figures showed this month.
“The sentiment in respect to the growth in China seems to be a driving force in the Canadian market and the commodities gains,” Sprung said. “Any sign that growth there won’t contract is taken as a positive sign.”
TransCanada Corp. fell 0.5 percent to C$41.70. The owner of the country’s biggest pipeline system may shorten the initial path for its rejected Keystone XL project, bringing oil from Montana’s Bakken Shale to refiners in the Gulf of Mexico and removing the need for federal approval, according to Alex Pourbaix, TransCanada’s president of energy and oil pipelines.
TransCanada’s $7 billion Keystone XL proposal to bring crude from Canada’s oil sands to the Gulf was rejected yesterday by the Obama administration. The project required U.S. approval because it crossed the border with Canada. The company may seek that approval after it builds the segment from Montana to the Gulf, Pourbaix said.
Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi project in Mongolia, rose 1.2 percent to C$19.54. Teck Resources (TCK/B) rallied 2.9 percent to C$42.10.
HudBay Minerals Inc., which mines copper, gold and zinc, rallied 4.4 percent to C$11.48.
Finning International Inc. (FTT) rose 4.1 percent to C$27.16, the highest price since July 29. The world’s biggest Caterpillar dealer had its rating raised to “outperform” from “market perform” at Raymond James Financial Inc.
New Millennium Iron rallied 20 percent to C$2.10 after reporting new drilling results from its Lac Ritchie property.
Grande Cache Coal Corp. (GCE) fell 5.8 percent to C$9.35, the biggest drop since October. The Calgary-based coal producer fell after Winsway Coking Coal Holdings Ltd., a Chinese miner that agreed to buy Grande Cache in October, was targeted by a short seller. Winsway, which denied the allegations by Jonestown Research that it imported less coal than reported, declined 8.6 percent in Hong Kong.
A gauge of gold stocks in the S&P/TSX fell for a third day as the metal declined from a five-week high after the drop in the unemployment benefits claims revived prospects for economic growth and eroded the appeal of precious metals as a hedge.
Barrick Gold Corp. (ABX) fell 3.2 percent to C$46.97, the lowest price since Dec. 30. Kinross Gold Corp., Canada’s third-largest gold producer, tumbled 3.5 percent to C$10.17, the lowest price since 2008.
North American Palladium Ltd. fell 11 percent to C$2.40, the lowest price since Oct. 5.
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