Canadian stocks rose as advances in energy and technology shares offset a plunge in gold prices following the U.S. Federal Reserve’s decision to cut stimulus.
CGI Group Inc. jumped 2.5 percent after Desjardins Securities Inc. raised its rating on the information-technology company. Detour Gold Corp. and Torex Gold Resources Inc. fell more than 3.8 percent as gold dropped below $1,200 an ounce to a three-year low. Martinrea International Inc. plunged 21 percent after BMO Capital Markets downgraded the shares.
The Standard & Poor’s/TSX Composite Index (SPTSX) increased 57.47 points, or 0.4 percent, to 13,392.20 at 4 p.m. in Toronto. The benchmark equity gauge has risen 2 percent this week, poised for its first week of gains since Nov. 15.
“There seems to be some euphoria from yesterday spilling over into Toronto, since it wasn’t up as much as the U.S.,” Barry Schwartz, a fund manager with Baskin Financial Services Inc., said in a phone interview from Toronto. His firm manages C$600 million ($560.1 million). “People seem to be rotating out of anything to do with precious metals.”
The S&P 500 rallied 1.7 percent yesterday after the U.S. central bank said it will cut its monthly bond purchases to $75 billion from $85 billion starting in January. The Fed is taking its first step toward unwinding the monetary stimulus that Chairman Ben S. Bernanke put in place to help the economy recover from one of its worst recessions.
Gold prices fell 3.4 percent to $1,193.60, the lowest settlement price since August 2010. The price of the precious metal is poised for the first annual drop in 13 years.
Producers of raw materials in the S&P/TSX fell 0.4 percent. The S&P/TSX Gold Index dropped 1.8 percent for its third day of losses. Detour plunged 10 percent to C$4.03 and Torex decreased 3.8 percent to C$1.01. B2Gold Corp. declined 3.2 percent to C$2.12.
Sherritt International Corp. jumped 8.6 percent, the biggest gain since Oct. 2011, to C$3.28. Royal Bank of Canada analyst Patrick Morton said that Sherritt, an oil producer with a stake in the nickel metals business, may benefit from a rebound in nickel prices amid Indonesia’s planned ban on mineral-ore shipments.
HudBay Minerals Inc. climbed 4.8 percent to C$7.92 after Haywood Securities Inc. analysts put a buy rating on the stock, with a target price of C$9.50.
CGI rose 2.5 percent to C$37.99 after Desjardins analyst Maher Yaghi upgraded the shares to buy from hold and raised CGI’s target price to C$43 a share.
Martinrea plunged 21 percent, the biggest drop since 1998, to C$7.48 after BMO analyst Peter Sklar downgraded the metal manufacturer to underperform from market perform, citing litigation costs and expectations fourth-quarter earnings may fall short of previous forecasts.
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