Canadian Stocks Rise a 3rd Day Before U.S. Fed Policy Statement

Canadian stocks rose a third day, after gaining the most in two weeks yesterday, as rising technology shares offset a slump in oil producers before a U.S. Federal Reserve policy statement tomorrow.

Wi-Lan Inc. rose 3.6 percent to lead technology stocks higher. Rockwell Diamonds Inc. soared the most in four years after the company found four rough diamonds of at least 100 carats. Potash Corp. of Saskatchewan Inc. and Agrium Inc. fell more than 1.5 percent after a rival producer cut its quarterly forecast for fertilizer sales and prices.

The Standard & Poor’s/TSX Composite Index (SPTSX) rose 17.23 points, or 0.1 percent, to 12,834.11 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has added 1.4 percent in September. Trading volume was in line with the 30-day average.

“There’s a lot of wait-and-see attitude in front of the Fed meetings tomorrow, there’s not a ton of conviction,” said Bob Decker, a fund manager with Aurion Capital Management, in an interview from Toronto. His firm manages about C$6 billion ($5.8 billion). “There’s a large amount of cash on the sidelines that could be convinced to move once the uncertainty surrounding tapering is removed.”

The Fed began a two-day meeting to weigh potential reductions in the rate of its monthly bond buying. The stimulus has helped fuel a global rally in equities.

Economic Data

Factory sales rose 1.7 percent to C$49.5 billion in July, the fastest in five months, on gains for commodities producers from crude to lumber and fabricated metals. The increase exceeded all 18 economist forecasts in a Bloomberg survey.

In China, foreign-direct investment grew 0.6 percent last month, compared with the Bloomberg estimate of 12.5 percent growth.

Eight of 10 main groups in the benchmark gauge advanced today, led by a 1.5 percent gain among technology stocks. Energy stocks fell the most, sliding 0.3 percent.

Element Financial Corp., the top-performing company in the S&P/TSX Financials Index this year with a 91 percent gain, added 1 percent to a record C$13.55.

Royal Bank of Canada, the nation’s largest lender, rose 0.6 percent to C$66.32 and Toronto-Dominion Bank added 0.5 percent to C$91.43. Financial stocks added 0.3 percent as a group.

Wi-Lan increased 3.6 percent to C$3.75, extending a three-day rally to 12 percent. BlackBerry Ltd., the Waterloo, Ontario-based smartphone maker, rose 2 percent to C$10.88.

Valeant Pharmaceuticals

Valeant Pharmaceuticals International Inc. (VRX) climbed 1.3 percent to C$105.83, the highest close in a month, after Gary Nachman with Goldman Sachs Group Inc. initiated coverage of the drugmaker with a buy rating.

Energy producers slid, halting a three-day winning streak. Crude fell to the lowest level in almost four weeks as a U.S. agreement with Russia to eliminate Syria’s chemical weapons reduced supply risk and on speculation that the Federal Reserve will start tapering stimulus measures.

Niko Resources Ltd., an oil and gas exploration company, dropped 5.3 percent to C$3.91. Bankers Petroleum Ltd. lost 2.4 percent to C$3.74.

Potash Corp. of Saskatchewan fell 2 percent to C$33.39 and Agrium retreated 1.5 percent to C$93.46. Mosaic Co., North America’s second-largest fertilizer producer, cut its quarterly forecast for potash and phosphate sales and prices because crop-nutrient markets have “softened.”

Fertilizer Markets

Global fertilizer markets have weakened, in part, because of fertilizer distributors’ cautiousness related to the breakup of Belarusian Potash Co., Mosaic said in a statement. On July 30, OAO Uralkali, the world’s largest potash producer, quit Belarusian Potash, the largest trader of the crop nutrient, because of a dispute with its partner Belaruskali.

“Dealers are cautious and are deferring purchases,” Jim Prokopanko, Mosaic’s chief executive officer, said in the statement.

Rockwell Diamonds (RDI) jumped 45 percent to 42 Canadian cents, the most since June 2009, after announcing it has recovered four rough diamonds, one as large as 169 carats, from its operations in the Middle Orange River region in South Africa. The stones will be sold into a joint venture with Steinmetz Diamonds at market value, the company said in a statement.

To contact the reporters on this story: Eric Lam in Toronto at elam87@bloomberg.net; Aubrey Pringle in New York at apringle1@bloomberg.net

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

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