Canadian Stocks Gain as Oil, Metals Rally on Greek Aid Deal
Canadian stocks rose to a five-month high as metals and oil advanced after Greece won a second bailout, easing concern the European debt crisis will crimp growth and demand for commodities.
Suncor Energy Inc. (SU), the country’s largest oil and gas producer, increased 1.8 percent as oil rose to its highest price in nine months. Barrick Gold Corp. (ABX), the world’s largest gold producer, rose 3 percent, while Teck Resources Ltd. (TCK/B), Canada’s largest base-metals and coal producer, also jumped 3 percent. Ivanhoe Mines Ltd. rallied 1.2 percent after it was rated buy in new coverage at Bank of America Corp.
The S&P/TSX Composite Index (SPTSX) rose 165.06 points, or 1.3 percent, to 12,623.36, the highest closing level since Sept. 8.
“It’s more confirmation that things are getting better,” Anil Tahiliani, a money manager at McLean & Partners in Calgary, said in a telephone interview. The firm oversees about C$1 billion ($1 billion). “Oil has rallied, so we see gold and other commodities that are related to oil rally off of that.”
The index advanced eight of the past nine weeks as improving U.S. employment, manufacturing and housing data overshadowed the European debt crisis. Seventy-four percent of Canadian exports went to the U.S. last year, according to Statistics Canada.
European finance ministers approved 130 billion euros ($172 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing more debt relief to shield the region from a default. Greece’s debt may still balloon to 160 percent of gross domestic product in a worst-case scenario, analysis by the International Monetary Fund and European officials indicated.
Materials companies led gains in Canada as metals rose on improved prospects for commodity use. Gold had the biggest advance in more than three weeks as Iran pledged to press on with its efforts to develop nuclear energy, increasing political tension and demand for a haven. Copper in New York rose the most since Nov. 30 as China eased bank-reserve requirements for a second time in three months.
Barrick advanced 3 percent to C$48.25. First Quantum Minerals Ltd. (FM), the country’s second-biggest publicly traded copper producer, gained 3.7 percent to C$23.06. Teck Resources jumped 3 percent to C$39.44.
NovaGold Resources Inc. (NG), which is developing projects in Alaska and British Columbia, rose 3.9 percent to C$8.74. The company said its shareholders will get one share of NovaCopper Inc., a unit it plans to spin off, for every six NovaGold shares they hold. The spinoff will be voted on at a shareholder meeting in Vancouver on March 28, NovaGold said.
Ivanhoe Mines, Rio Tinto Group’s majority-owned partner in Mongolia’s Oyu Tolgoi copper project, rallied 1.2 percent to C$16.65 after it was rated buy at Bank of America, with a price estimate of C$22.
The S&P/TSX Energy Index (STENRS) rose 1.4 percent. Suncor increased 1.8 percent to C$34.74. Canadian Natural Resources Ltd. (CNQ), Canada’s second-largest energy company by market value, rallied 1.3 percent to C$37.86. PetroBakken Energy Ltd. (PBN), a western Canadian oil and gas producer, jumped 7.1 percent to C$16.51.
Oil in New York climbed 2.5 percent to $105.84 a barrel, also boosted when Iran said it will stop selling crude to France and Britain in order to preempt a European Union ban.
Flint Energy Services Ltd. (FES) surged 66 percent to C$24.79 after URS Corp., a San Francisco-based construction company, agreed to buy the oilfield-services company for C$1.25 billion in cash to add projects servicing oil and natural gas producers in Western Canada. Flint shareholders will get C$25 per share.
The S&P/TSX Financials Index rose 0.9 percent. Royal Bank of Canada (RY), the country’s biggest lender by assets, gained 1.1 percent to C$53.72. Toronto-Dominion Bank (TD), its largest domestic rival, advanced 0.8 percent to C$79.18. Sun Life Financial Inc. (SLF), Canada’s third-largest insurer, jumped 3.5 percent to C$21.47.
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