Canadian stocks rose as gold rallied to a six-month high, overshadowing declines in oil producers as crude slumped on rising U.S. supplies.
Iamgold Corp. and Detour Gold Corp. rallied at least 6.8 percent as gold futures climbed for a third day. Canadian Natural Resources Ltd. (CNQ) and BlackPearl Resources Inc. declined at least 1.4 percent as crude dropped the most in two months. Quebecor Inc. sank 1.8 percent after analysts at National Bank Financial lowered their rating for the stock.
The Standard & Poor’s/TSX Composite Index (SPTSX) rose 51.77 points, or 0.4 percent, to 14,319 at 4 p.m. in Toronto, erasing earlier losses of as much as 0.5 percent. The index has gained 5.1 percent this year.
“Right now if you look at the medium to long-term time frame, everything is still very positive,” said Bruce Campbell, fund manager at StoneCastle Investment Management Inc. in Kelowna, British Columbia. The firm manages about C$100 million ($90 million). “In the short-term, we’ve been overbought here for a while since the market went straight up in February.”
Gold producers led gains today with the S&P/TSX Gold Index surging 3.3 percent for a second day of gains, as all 23 stocks in the gauge advanced. Gold for April delivery surged 1.8 percent to settle at $1,370.50 an ounce in New York, extending the fifth weekly gain in six as investors seek a haven amid tension between Russia and the West over the fate of the Crimea region of Ukraine.
Iamgold jumped 6.8 percent to C$4.40 and Detour Gold gained 7.8 percent to C$10.67. Detour Gold is the best-performing stock in the S&P/TSX this year, with a 160 percent advance.
Osisko Mining Corp. added 3.6 percent to C$7.72. The company said it will produce 525,000 to 575,000 ounces of gold in 2014, an increase of 11 percent to 21 percent from 2013 levels.
West Texas Intermediate crude decreased 2 percent to $97.99 a barrel in New York, settling at less than $100 for the first time since Feb. 11 after the Energy Information Administration reported U.S. supplies rose 6.18 million barrels last week, three times as much as expected.
Canadian Natural Resources dropped 1.4 percent to C$40.06 and BlackPearl Resources declined 2.4 percent to C$2.40 as energy stocks retreated 0.1 percent as a group. Seven of 10 industries in the S&P/TSX rose on trading volume 2.6 percent lower than the 30-day average.
A gauge of commodities prices slumped 0.7 percent, dropping to a three-week low. China, the world’s largest consumer of metals, announced last week an economic growth target of 7.5 percent, the weakest since 1990. The nation is scheduled to release industrial output data tomorrow.
HudBay Minerals Inc. fell 1.7 percent to C$8.25 and Turquoise Hill Resources Ltd. dropped 3.5 percent to C$3.85.
BlackBerry Ltd. lost 0.6 percent to C$10.27 for a sixth straight decline, the longest streak since July. Shares of the Waterloo, Ontario-based smartphone maker have slumped 11 percent during that period.
Quebecor Inc. (QBR/B) fell 1.8 percent to C$24.94. The media company, which recently purchased wireless spectrum for C$233 million in a government auction and may become Canada’s fourth national mobile phone carrier, is scheduled to report fourth-quarter earnings tomorrow.
Adam Shine, analyst with National Bank, lowered his rating for the stock to sector perform, the equivalent of a hold, and cut his price target to C$27.50 from C$30.
“Our updated forecast reflects competitive pressures and the maturity of the cable platform,” Shine said in the note to clients. He forecasts 3,200 cable television cancellations in the quarter, due in part to competition from BCE Inc.
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