Canada Stocks Rise Most in 11 Months on Bernanke Stimulus Pledge

Canadian stocks rose the most in 11 months as commodity producers rallied amid speculation central banks will keep acting to stoke economic growth in China and the U.S., the country’s two biggest trading partners.

OceanaGold Corp. and Dundee Precious Metals Inc. surged at least 14 percent as metals prices jumped. Canadian Natural Resources Ltd. added 1.9 percent as energy shares rallied. BlackBerry Ltd. lost 1.1 percent as two executives left the smartphone maker. Corus Entertainment Inc. (CJR/B) slumped 6.9 percent after reporting fiscal third-quarter revenue that fell short of estimates.

The Standard & Poor’s/TSX Composite Index gained 186.33 points, or 1.5 percent, to 12,493.26 at 4 p.m. in Toronto. The gain, the most since August 2012, extended a four-day rally to 3 percent and erased a loss for the year. Trading was in line with the 30-day average at this time of the day.

“The central banks have made it clear that they are going to support the economy,”Barry Schwartz, fund manager with Baskin Financial Services Inc., said from Toronto. He helps manage more than C$500 million ($482 million) with the firm. “Indirectly, they want to make everybody richer and one way you do it is make the stock market go higher.”

The rally, the S&P/TSX’s longest since May 22, has helped erase a 4.3 percent plunge between June 19 and June 24. That rout started when Federal Reserve Chairman Ben S. Bernanke said after a June 18-19 meeting that the central bank may reduce its $85 billion of monthly bond purchases this year.

Bernanke said after the markets closed yesterday that “highly accommodative monetary policy for the foreseeable future is what’s needed,” and minutes of the Fed’s June meeting showed officials would want to see more signs of job growth before reducing support.

China Stimulus

Fed stimulus has helped fuel gains in global stocks and the prospect for less support roiled markets in recent weeks as investors guessed the timing of any reduction. Benchmark U.S indexes closed at records today.

Global equities rallied, with China’s benchmark gauge adding 3.2 percent. The government will soften its stance on monetary policy, Nomura International (HK) Ltd. said, after Premier Li Keqiang said growth must stay above a certain floor. The nation’s economy slowed for eight of the last nine quarters.

Data in Canada today showed an index of new home prices rose in May. Other reports this week also indicated housing-market strength, as building permits rose a fifth month in May and housing starts fell less than economists predicted in June.

All 10 industries in the S&P/TSX advanced at least 0.3 percent. Raw-materials producers paced the gains, adding 4.6 percent to the highest level since June 19.

Gold Rally

Gold producers rallied for a third day, adding 6.9 percent. The price of the metal for August delivery rose to a two-week high. Dundee Precious Metals led the group with a 16 percent advance, the most since September 2009, to C$4.96. OceanaGold jumped 14 percent to C$1.47.

Fortuna Silver Mines Inc. climbed 7 percent to C$3.54 as silver rallied to the highest level since June 19.

Utility companies added 1.8 percent as a group, led by a 4.1 percent gain in Atlantic Power Corp. The company, which holds indirect interests in power plants in the U.S., closed at C$4.56.

Canadian Natural Resources added 1.9 percent to $33.29 and Niko Resources Ltd. gained 2 percent to C$8.36, driving the S&P/TSX Energy Index to a 1.4 percent increase, its fourth straight gain.

BlackBerry retreated 1.1 percent to C$9.7, the lowest level in eight months, after it said two executives who were closely involved with its new smartphone operating system left the company. The stock dropped 4.9 percent yesterday as the vice president of U.S. sales departed.

Corus Entertainment Inc. slumped 4.9 percent, the most in the index, to C$23.55. The Toronto-based media company reported fiscal third-quarter revenue that fell short of estimates.

To contact the reporter on this story: Katie Brennan in New York at kbrennan23@bloomberg.net

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

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