Canada Stocks Rise as Chinese Manufacturing Expands, Banks Gain

Canadian stocks rose to a 26-month high, led by energy and bank shares, after faster-than-forecast growth in Chinese manufacturing and U.S. private payrolls and earnings from National Bank of Canada that topped estimates.

Suncor Energy Inc., the country’s largest oil and gas producer, gained 2.9 percent as fuel prices advanced. National Bank, Canada’s sixth-biggest lender by assets, climbed 2.9 percent after it raised its dividend. Magna International Inc., the country’s largest auto-parts maker, rallied 3.8 percent after JPMorgan Chase & Co. raised its rating on the shares.

The Standard & Poor’s/TSX Composite Index rose 195.47 points, or 1.5 percent, to 13,148.35, the highest close since September 2008.

“The really positive news is the economy’s moving along very rapidly” in China, said Doug Davis, chief executive officer of Davis-Rea Ltd., which manages C$400 million ($392 million) in Toronto. “If the Chinese economy keeps roaring ahead, what Canada has to offer is wanted, and demand is in the marketplace.”

The S&P/TSX has gained for five-straight months, surging 15 percent from July through November. Raw-material companies led the advance as commodity prices increased in part on demand from emerging markets such as China, whose economy may grow 10 percent this year, according to the median forecast in a Bloomberg survey of economists.

China’s Purchasing Managers’ Index rose to a seven-month high in November, the country’s logistics federation said today. China is the world’s largest consumer of base metals and second-biggest energy user behind the U.S.

U.S. Jobs

U.S. companies boosted payrolls by 93,000, the most since November 2007, after a revised 82,000 rise in October that was almost double the initial estimate, according to figures from ADP Employer Services. The median projection of 40 economists surveyed by Bloomberg News called for a 70,000 gain last month.

Crude futures advanced to a two-week high. Suncor gained 2.9 percent to C$35.39. Canadian Natural Resources Ltd., the country’s second-largest energy producer by market value, increased 4.5 percent to C$41.28. Oilfield services company Trican Well Services Ltd. jumped 5.4 percent to a 27-month high of C$20.80.

All major base metals traded on the London Metal Exchange climbed.

Miners Rally

Teck Resources Ltd., Canada’s largest base-metals and coal producer, increased 2.9 percent to a record C$52.47. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, climbed 6.7 percent to C$97.27. Lundin Mining Corp., which mines base metals in Europe, surged 6.5 percent to C$7.04 after Greg Barnes, an analyst at Toronto-Dominion Bank, raised his rating on the company to “buy” from “hold.”

The S&P/TSX Banks Index advanced to a five-week high after National Bank raised its quarterly dividend 6.5 percent to 66 cents a share. National Bank is the first Canadian lender to boost its payout in two years.

“Everyone thinks the other banks, to be competitive, will have to raise dividends as well,” Davis said.

National Bank rallied 2.9 percent to a record C$69.82. Royal Bank of Canada, the country’s largest bank, gained 2.4 percent to C$56.24. Canadian Imperial Bank of Commerce, which is scheduled to report fourth-quarter financial results tomorrow, advanced 2.5 percent to a post-2007 high of C$81.05.

Magna gained 3.8 percent to a six-year high of C$50.84. Himanshu Patel, a JPMorgan analyst, raised his rating on the Aurora, Ontario-based company to “overweight” from “neutral.” Magna shares have soared 91 percent this year as the North American auto industry recovered from the recession and the company bought out founder Frank Stronach’s controlling stake.

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