Canada Stocks Rise as Banks, Energy Shares Gain Amid Taper Bets

Canadian stocks rose, halting two days of losses, as gains among lenders and energy producers overshadowed disappointing retailer results while investors weighed the timing of any Federal Reserve stimulus cuts.

Semafo Inc. rallied 8.9 percent after the miner said it received approval to develop two new deposits. Royal Bank (RY) of Canada climbed 1.7 percent to pace gains among financial stocks. Suncor Energy Inc. added 2 percent as crude prices climbed. Grocery retailers Loblaw Cos. (L) and Metro Inc. tumbled at least 5.7 percent on disappointing earnings. CAE Inc. (CAE) dropped 0.6 percent as the aviation training company faced declining revenue in its civil and military segments.

The Standard & Poor’s/TSX Composite Index (SPTSX) rose 44.62 points, or 0.3 percent, to 13,370.66 at 4 p.m. in Toronto, after declining as much as 0.3 percent earlier. The benchmark Canadian equity gauge has advanced 7.5 percent this year, the third-worst performance among global developed markets, ahead of Hong Kong and Singapore.

“One of the main drivers around the market performance is the comments from the Fed,” said Anish Chopra, fund manager with TD Asset Management Inc. in Toronto. He helps manage C$216 billion ($206 billion) with the firm. “There’s always some uncertainty around tapering, but it looks like tapering could be earlier.”

Fed Bank of Atlanta President Dennis Lockhart said yesterday a paring of U.S. bond purchases “could very well take place” next month. Investors have been watching for clues on when the central bank will begin to reduce monetary support as the economy recovers. The stimulus has helped fuel a global rally in equities.

Lenders Rise

Eight of 10 groups in the benchmark Canadian index advanced today, with energy and financial shares adding at last 0.5 percent. Trading volume was 7.5 percent above the 30-day average at this time of the day.

Royal Bank rose 1.7 percent to C$71.06, a record close, on trading volume more than four times higher than the three-month average. Bank of Montreal gained 0.9 percent to C$73.44.

Suncor Energy added 2 percent to C$37.23, halting two days of declines. Oil rose 0.9 percent in New York on speculation that increasing refinery profits from making gasoline and heating oil will bolster use of the raw material.

Semafo surged 8.9 percent to C$2.95 for the biggest gain in the S&P/TSX. The company’s chief executive officer said today it would start production at one of the developments in 2014 and in 2015 at the other.

Grocer Competition

Loblaw sank 7.6 percent to C$44.23, the biggest slide in six years. The nation’s largest grocer now forecasts operating income for 2013 to be flat compared with 2012, due to higher spending amid increasing competition.

Metro retreated 5.7 percent to C$62, the most since November 2008. Revenue of C$2.61 billion fell short of analysts’ estimates of C$2.63 billion and same-store sales slid 1.8 percent.

Canadian grocers are under pressure as bigger U.S. rivals such as Target Corp. and Wal-Mart Stores Inc. expand grocery options in the country.

CAE, the St. Laurent, Quebec-based flight simulator and training company, fell 0.6 percent to C$11.96, paring earlier losses, after reporting second-quarter revenue of C$487.5 million, short of analysts’ estimates of C$536.5 million.

The company also increased its dividend 20 percent, to 6 Canadian cents a share from 5 cents.

First Quantum Minerals Ltd., a copper miner, declined 4.3 percent to C$18.56 as the price of the metal fell the most in 15 weeks. Copper output in China rose to a monthly record in October.

NuVista Energy Ltd. (NVA) decreased 3.7 percent to C$7.05. The Calgary-based energy company yesterday said it will sell 11 million shares at C$7.10 a share to raise about C$78.1 million. It plans to use the cash to pay down debt and help fund its 2013 and 2014 capital program.

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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