Canada Stocks Hit 1-Month High as Commodities Jump on China Data

Canadian stocks rose for the fifth straight day, reaching a one-month high, as commodities rallied after reports showed China’s trade and Germany’s industrial output beat estimates.

First Quantum Minerals Ltd. (FM) and Teck Resources Ltd. advanced more than 4.9 percent as industrial metals gained. Kinross Gold Corp. (K) added 6.3 percent as earnings beat forecasts. Iamgold Corp. and Barrick Gold Corp. climbed at least 8.6 percent after the precious metal rallied. Tim Hortons (THI) Inc. slumped 2.6 percent after same-store sales fell in its restaurants in Canada and the U.S.

The Standard & Poor’s/TSX Composite Index (SPTSX) rose 120.94 points, or 1 percent, to 12,585.05 at 4 p.m. in Toronto, the highest since April 2. The benchmark equity gauge has added 2.1 percent since May 1 and is up 1.2 percent this year. Trading volume was 5 percent above the 30-day average.

“A number of stocks are now factoring in a better economy; it may be premature but that’s what’s happening,” Irwin Michael, fund manager with ABC Funds, said on the phone from Toronto. His firm manages about C$800 million ($797 million). “Commodities are acting better. China’s been growing about 7 percent. Europe is still pretty bleak and the only shining light is Germany.”

China reported gains in both imports and exports, which may ease concern that domestic demand is slowing after the world’s second-largest economy unexpectedly decelerated last quarter. China is Canada’s second biggest trade partner.

German industrial production unexpectedly rose for a second month in March in a further sign that Europe’s largest economy is returning to growth.

Materials Producers

Commodities producers contributed most to gains in the S&P/TSX as six of 10 industries advanced. The S&P/TSX Materials Index climbed 4.5 percent, the most in two weeks.

First Quantum gained 5.2 percent to C$18.71 and Teck Resources (TCK/B) advanced 4.9 percent to C$29.34 as copper futures rose to a three-week high. China accounts for more than 40 percent of global copper consumption. Prices for aluminum, tin, zinc, nickel and lead also advanced.

Kinross rose 6.3 percent to C$5.61 after reporting adjusted earnings of 15 cents a share, ahead of analysts’ average estimates of 13 cents according to a Bloomberg survey. Production rose 10 percent from a year ago, while all-in costs fell, the company said in a statement.

Gold Producers

Iamgold jumped 12 percent to C$6.03 after posting better-than-expected earnings. Barrick, the world’s largest gold miner, rallied 8.6 percent to C$21.50.

Gold producers rallied 6.5 percent as a group to a three-week high as the metal’s price advanced 1.7 percent to settle at $1,473.70 an ounce in New York. Gold imports to China from Hong Kong more than doubled to a high in March, Hong Kong government data showed yesterday.

Parkland Fuel Corp. (PKI), Canada’s largest independent fuel distributor, climbed 7.2 percent to C$17.48, the biggest gain in 18 months. First-quarter net income rose to 42 Canadian cents a share from 26 cents a year earlier. Sales jumped 14 percent. Trevor Johnson, an analyst with National Bank Financial, upgraded the stock to the equivalent of a buy from hold.

Tim Hortons, Canada’s largest coffee and doughnuts chain, slumped 2.6 percent to C$57.13. Sales at Canadian stores open for more than a year declined 0.3 percent in the first quarter compared with a year ago. The Oakville, Ontario-based company blamed the economy and weather for the drop.

The company also announced it has hired Marc Caira, a senior Nestle SA executive, as its new president and chief executive officer effective July 2.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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