Canada Stocks Rise on Banks After U.S. Production Data Advances
Canadian stocks advanced for the second day after U.S. industrial production rose and investors awaited signs of whether the Federal Reserve and European Central Bank would act to spur economic growth.
Royal Bank of Canada (RY) and Toronto-Dominion Bank (TD) advanced at least 0.6 percent. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, climbed 0.9 percent. Bank shares contributed most to gains on the Standard & Poor’s/TSX Composite Index. (SPTSX)
The S&P/TSX gained 51.83 points, or 0.4 percent, to 11,905.44. The gauge added 0.6 percent in the past two days.
“People are positioning themselves for a potential solution out of Europe by buying the financial stocks,” Brian Huen, who helps manage C$55 million at Toronto-based Red Sky Capital Management Ltd., said in phone interview.
Industrial production in the U.S. rose in July, led by a pick-up in motor vehicle output and a rebound in utility use during the hottest month on record. In a separate report by the Federal Reserve Bank of New York, manufacturing in the New York area contracted in August for the first time in 10 months.
The Federal Open Market Committee on Aug. 1 reiterated its pledge to ease policy further if necessary, and ECB President Mario Draghi promised last month that policy makers will do whatever is needed to preserve the euro. Investors are awaiting Fed Chairman Ben S. Bernanke’s speech Aug. 31 at the Kansas City conference in Jackson Hole, Wyoming, and an ECB meeting next month for more direction.
Royal Bank, the country’s largest lender, gained 1.4 percent to C$52.72. Toronto-Dominion Bank advanced 0.6 percent to C$79.79. Bank of Montreal (BMO) added 0.4 percent to C$57.33.
Gold companies advanced as the metal rose 0.3 percent to settle at $1,606.60 an ounce on the Comex in New York. Osisko Mining Corp. (OSK), which holds interest in the Canadian Malartic gold deposit in Quebec, added 2.5 percent to C$9.28. Barrick Gold Corp. (ABX), the largest producer of the metal, rose 1.1 percent to C$34.26. New Gold Inc. advanced 2.5 percent to C$10.20.
Great Basin Gold Ltd., a producer of the metal in South Africa and Nevada, plunged 43 percent to 25 cents, the most in almost 24 years. It warned investors it’s running out of cash after lower-than-expected production at the Burnstone mine. It will seek to raise at least C$60 million ($61 million) through a combination of asset sales or new shares. Chief Executive Officer Ferdi Dippenaar resigned.
Connacher Oil and Gas Ltd. (CLL), the oilsands company that has retained Goldman Sachs Group Inc. to explore stategic options, fell 9.3 percent to 39 cents after agreeing to sell a Montana refinery.
Potash Corp. increased 0.9 percent to C$43.28. Agrium Inc. (AGU), the largest farm retailer in the U.S., added 1.9 percent to C$97.70. The company met with Jana Partners LLC and other shareholders today after rejecting the hedge fund’s proposal for Agrium to spin off its retail unit, according to two people familiar with the situation.
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