Canadian stocks rose, sending the Standard & Poor’s/TSX Composite Index (SPTSX) to the highest level since May, after German Chancellor Angela Merkel affirmed support for the euro during a press conference in Ottawa and U.S. building permits jumped to a four-year high.
Barrick Gold Corp. (ABX) climbed 3.9 percent after the company said it is in preliminary talks to sell its Africa unit to China National Gold Group Corp. Cameco Corp. (CCO) added 5.2 percent as oil advanced in New York. Alderon Iron Ore Corp. (ADV) rallied 6.5 percent. Energy and raw-materials companies contributed the most to gains in the S&P/TSX.
The Canadian stocks gauge rose 127.14 points, or 1.1 percent, to 12,032.58. The benchmark index has climbed 1.6 percent over the last three sessions, erasing its 2012 losses.
“Merkel came out and reaffirmed her support for the euro,” Jeff Young, who helps manage C$900 million as chief investment officer at NexGen Financial Corp. in Toronto, said in a phone interview. “People are thinking that to support the euro, that’s going to necessitate bringing down the borrowing cost for euro members, which is going to necessitate help from the ECB, which means we’re going to get quantitative easing out of the ECB. That’s the chain of thought.”
Merkel backed the European Central Bank’s insistence on austerity conditions for helping reduce borrowing costs in indebted countries, saying Germany is “in line” with the ECB’s approach to defending the euro. She said that euro-area policy makers “feel committed to do everything we can to maintain the common currency.” Merkel also hailed Canada’s budget and debt discipline as a model for the 17-nation euro area.
Oil surged on the Comex in New York, climbing above $95 a barrel for the first time in three months on signals of future U.S. economic growth and concern that Israel will strike Iran and disrupt oil supplies.
U.S. building permits reached a four-year high, increasing to an 812,000 annual pace in July. Michael Oren, Israel’s U.S. ambassador, said yesterday that Israel would strike Iran if only to delay that country’s ability to produce nuclear weapons for a few years.
Canadian Natural Resources Ltd. rose 2.3 percent to C$31.53. Cameco added 5.2 percent to C$22.
Goldcorp Inc. (G) increased 4.7 percent to C$37.93 as the metal gained 0.8 percent on the Comex in New York. Kinross Gold Corp. rose 2.6 percent to C$8.25. Alderon Iron climbed 6.5 percent to C$2.45.
Barrick Gold added 3.9 percent to C$35.60. China, with $3.2 trillion of foreign-exchange reserves, has urged its companies to buy assets overseas, securing energy and commodity resources to feed industries from power generation to construction. A deal for Barrick’s 73.9 percent stake in African Barrick Gold Plc is not certain, the company said.
To contact the editor responsible for this story: Lynn Thomasson at email@example.com