Canada Stocks Climb as Oil Rebound Bolsters Energy Shares
Canadian stocks rose, sending the benchmark index toward the highest closing level since July 2011, as energy shares rallied after oil prices rebounded.
Arc Resources Ltd. and TransCanada Corp. added at least 1.1 percent, leading the advance among energy producers. Royal Bank of Canada and Bank of Nova Scotia each rose 1 percent. Nordion Inc. surged 10 percent after the producer of isotopes for nuclear medicine said it is reviewing alternatives to boost shareholder value. Research in Motion Ltd. fell 8 percent on concern its new BlackBerry 10 phones won’t reverse the company’s decline in smartphone sales.
The Standard & Poor’s/TSX Composite Index increased 16.28 points, or 0.1 percent, to 12,832.91 at 1:59 p.m. in Toronto. The benchmark gauge has gained 3.2 percent this year. Trading volume was about 35 percent above the 30-day average at this time of day.
“People are certainly buying the oil stocks,” said Brian Huen, managing partner at Toronto-based Red Sky Capital Management Ltd., which oversees C$225 million in assets . “Oil, given that it’s a late-cycle commodity, will benefit from people being more confident with the macro-economic environment.”
Oil extended a seven-week gain as orders for durable goods in the U.S. jumped, adding to optimism that an economic recovery will boost fuel demand. Crude prices advanced as much as 1 percent, reversing an earlier drop of as much as 0.4 percent, after the U.S. Commerce Department said orders rose 4.6 percent in December.
Arc Resources increased 1.4 percent to C$24.18 and TransCanada advanced 1.1 percent to C$49.32.
Financial shares rose 0.6 percent after Fitch affirmed the ratings of six Canadian banks and said their outlooks were stable. The group maintained their gains even after Moody’s Investors Service downgraded the long-term ratings on the six banks because of high consumer debt and elevated home prices.
Royal Bank of Canada, the country’s largest lender, increased 1 percent to C$62.69, approaching its highest-ever closing price. Bank of Nova Scotia added 1 percent to C$59.09.
Nordion added 10 percent, the most since January 2011, to C$7.09 after saying it is reviewing alternatives to boost shareholder value. The Ottawa-based company, whose isotopes help treat diseases such as cancer, also reported adjusted earnings of 34 cents a share for the quarter ended Oct. 31. That beat estimates of 26 cents a share, according analysts surveyed by Bloomberg.
Rogers Communications Inc. jumped 2.1 percent to C$47.21, the highest level since May 2008, after BMO Capital Markets analyst Tim Casey raised Canada’s largest wireless carrier to outperform from market perform.
RIM slumped 8 percent to C$16.20. Chief Executive Officer Thorsten Heins is set to take the stage in New York on Jan. 30 to unveil the new phones. The new product line is RIM’s attempt to keep its current customers and win back people who have switched to Apple Inc.’s iPhone and Samsung Electronics Co.’s Galaxy, which runs on Google Inc.’s popular Android platform.
“Everything we’ve seen suggests they are catching up to the competition, but there’s nothing here that says this is why you need this device more than anything else,” said Jan Dawson, chief telecommunications analyst with the New York office of London-based Ovum Ltd.
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