Canadian stocks rose the most in five weeks, led by commodity producers, as raw-material and energy futures gained after the Bank of Japan cut its benchmark interest rate.
Barrick Gold Corp., the world’s largest gold producer, jumped 2.3 percent as the metal rallied 1.9 percent, the most in three weeks. Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, increased 2.7 percent as crude oil climbed. Teck Resources Ltd., the country’s biggest base-metals and coal producer, advanced 4.1 percent as zinc soared the most since Aug. 26 in London.
The Standard & Poor’s/TSX Composite Index, rose 175.06 points, or 1.4 percent, to 12,498 as of 4:00 p.m. in Toronto the biggest gain since Aug. 27.
“The trade seems to be just believing governments are going to pull out all the stops to try to restart demand, which hasn’t worked so far,” said Danielle Park, who helps manage C$200 million ($197 million) as a money manager at Venable Park Investment Counsel Inc. in Barrie, Ontario.
The S&P/TSX surged 9.5 percent last quarter, the biggest quarterly gain since the three months ending September 2009, as gold gained for an eighth-straight quarter. Gold companies make up 11 percent of Canadian stocks by market value, according to Bloomberg data.
World stocks advanced and precious metals jumped after the Bank of Japan reduced its overnight call rate to a range of 0 percent to 0.1 percent from 0.1 percent. The central bank pledged to keep the benchmark interest rate at “virtually zero” until deflation has ended and set up a 5 trillion yen ($60 billion) fund to buy government bonds and other assets.
Also today, the Reserve Bank of Australia kept its benchmark interest rate at 4.5 percent. Most economists in a Bloomberg survey had expected the central bank to raise the overnight cash rate target.
Stocks extended their gains after the Institute for Supply Management said its index of U.S. non-manufacturing businesses rose to 53.2 last month from 51.5 in August. Economists had forecast a reading of 52, according to the median of 76 estimates in a Bloomberg survey.
Gold climbed to a record $1,342.60 an ounce as the U.S. dollar fell to an eight-month low against a basket of world currencies. Silver increased to a 30-year high.
Barrick rose 2.3 percent to C$48.18. Goldcorp Inc., the world’s second-largest gold-mining company by market value, gained 2 percent to C$44.84. Yamana Gold Inc., Canada’s fourth-biggest gold company by revenue, advanced 3.5 percent to C$11.95.
Weak Dollar, Strike
Crude oil for November delivery increased 1.7 percent to a five-week high of $82.82 a barrel in New York, boosted by the weak dollar and a strike at Marseille, France’s biggest oil port.
Canadian Natural climbed 2.7 percent to C$37.34. Suncor Energy Inc., Canada’s largest oil and gas producer, rose 3.7 percent to C$34.86. Pacific Rubiales Energy Corp., which produces oil and gas in Colombia, gained 2.2 percent to C$28.97.
Copper advanced to a 26-month high in New York after Goldman Sachs Group Inc. forecast the metal will soar 35 percent over the next year. Zinc surged 3.7 percent in London.
Teck Resources Ltd., Canada’s biggest base-metals and coal producer, increased 4.1 percent to C$44.06. Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, climbed 4.1 percent to C$24.80. Lundin Mining Corp. rallied 9.5 percent to C$5.51.
S&P/TSX financial companies rose the most in five weeks. Royal Bank of Canada, the country’s largest bank, gained 1.9 percent to C$54.67 after Darko Mihelic, an analyst at Cormark Securities Inc., raised his rating on the shares to “buy” from “market perform.” Toronto-Dominion Bank, Canada’s No. 2 lender by assets, advanced 2.2 percent to C$75.31.
Sino-Forest Corp., the largest Canada-based forestry company by market value, jumped 4 percent to C$18.01 after Paul Quinn, a Royal Bank analyst, boosted his 12-month price estimate on the shares to C$25 from C$23. In a note to clients, Quinn said China, where Sino-Forest operates, should have a “soft landing” as it seeks to cool down its economy.