Canadian Stocks Rise on Commodities Rally Led by Oil
Canadian stocks rose for a second day as a rally in commodity prices offset concern over a slowing global economy.
Energy companies contributed most to the advance among 10 industries in the Standard & Poor’s/TSX Composite Index (SPTSX), while banks and raw-materials producers lost the most. Suncor Energy Inc. (SU), the nation’s largest oil company, advanced 1.1 percent. Royal Bank of Canada (RY) and Bank of Nova Scotia (BNS) retreated at least 0.2 percent.
The S&P/TSX added 6.65 points, or less than 0.1 percent, to 11,521.18. It fell as much as 0.4 percent and gained as much as 0.2 percent during the day. The index has lost 3.6 percent in 2012.
The International Monetary Fund lowered its global growth estimate for 2013 to 3.9 percent from 4.1 percent, citing the debt crisis in Europe as a drag on emerging markets. Oil rose for a fourth day as manufacturing in the New York region expanded in July at a faster pace than anticipated.
“The IMF forecast plays into the whole global growth issue,” Chief Investment Officer Jeff Young at NexGen Financial Corp. (NFX), who manages C$947 million, said in a phone interview. “It may take some improvement in the leading indicators and some improvement in the economic data before the market regains confidence.”
The S&P GSCI Spot Index of commodities rallied 1.5 percent, with 15 of the 24 raw materials advancing. A U.S. drought drove grain prices higher on concern over falling harvests. Oil for August delivery rose $1.33 to settle at $88.43 a barrel on the New York Mercantile Exchange.
Suncor added 1.1 percent to C$29.72. Arc Resources Ltd. (ARX), the western Canada oil and natural gas explorer, gained 3.2 percent to C$23.22. Imperial Oil Ltd., the second-largest energy provider in Canada, rose 0.4 percent to C$42.54.
MEG Energy Corp. (MEG), a Calgary-based oil sands developer, jumped 7.2 percent to C$38.05, the most since April, after the company boosted output targets at its oil sands project in Alberta.
Royal Bank, the nation’s largest lender, lost 0.5 percent to C$52.18. Bank of Nova Scotia, the third-largest lender in Canada, retreated 0.2 percent to C$52.13.
First Quantum Minerals Ltd. (FM) declined 3.2 percent to C$16.97 as a strike at the company’s unit in Mauritania led to the death of an employee yesterday.
To contact the reporter on this story: Katia Dmitrieva in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Lynn Thomasson at email@example.com