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Canadian Stocks Gain as Energy, Material Companies Lead Rally

Dec. 2 (Bloomberg) -- Canadian stocks gained for a fourth day as commodity producers rallied after the European Central Bank delayed its withdrawal of stimulus measures, offsetting declines by banks on lower profits.

Talisman Energy Inc. increased 1.4 percent after it got a revolving line of credit and oil prices advanced. Toronto-Dominion Bank, the country’s second-largest bank by assets, slid 2.7 percent after missing the average analyst earnings estimate. Pharmacy-benefits manager SXC Health Solutions Corp. soared 10 percent after agreeing to buy MedfusionRx LLC of Birmingham, Alabama, for $100 million.

The Standard & Poor’s/TSX Composite Index rose 15.18 points, or 0.1 percent, to 13,163.53, a 27-month high.

“The European Central Bank has been supporting the markets,” said Blair Falconer, who oversees about C$900 million ($895 million) as a money manager at HSBC Securities (Canada) Inc. in Toronto. “The financial sector is not performing well today, but we’ve really had some strong commodity moves overnight and that’s supporting the Canadian dollar and therefore the stock market.”

The S&P/TSX has gained 2.1 percent this week as copper and oil futures have surged at least 4.9 percent. The U.S. dollar is heading toward its first decline in four weeks after rallying on concerns European countries might default on their debt.

Unlimited Loans

Stocks and commodities advanced after European Central Bank President Jean-Claude Trichet told reporters at a press conference in Frankfurt the ECB will offer banks unlimited loans through the first quarter over periods of seven days, one month and three months.

The National Association of Realtors’ report that U.S. pending home sales jumped by a record 10 percent in October boosted prices further.

Crude oil futures for January delivery increased 1.4 percent to a two-year high of $88 a barrel. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, gained 1.2 percent to C$41.76. Cenovus Energy Inc., Canada’s No. 5 company in the industry by market value, advanced 2.6 percent to C$30.95, the highest since being spun off from EnCana Corp. last year.

Talisman Energy climbed 1.4 percent to C$20.12. The oil and gas company with operations in North America, the North Sea and Indonesia got a C$3.85 billion revolving line of credit for general corporate purposes, according to a person familiar with the deal.

Copper rose for a fourth day in New York, while zinc gained 4.6 percent in London. Teck Resources Ltd., Canada’s largest base-metals and coal producer, rallied 3 percent to a record C$54.02. Copper, zinc and gold producer Inmet Mining Corp. advanced 5.4 percent to C$69.71 after reselling a royalty from the Ok Tedi mine in Papua New Guinea to Ok Tedi Mining Ltd. for $335 million.

The housing data also boosted shares of forestry companies. West Fraser Timber Co., Canada’s largest publicly traded lumber producer, surged 8.7 percent to a five-year high of C$47.91. Sino-Forest Corp., which logs in China, climbed 4.6 percent to C$23.69.

Canada’s eight publicly traded banks each declined after TD and Canadian Imperial Bank of Commerce reported fourth-quarter financial results.

TD missed the average analyst forecast for the third straight quarter, trailing the average of 16 estimates in a Bloomberg survey by 5.3 percent.

While CIBC, Canada’s fifth-largest bank, topped its average estimate by 2.8 percent, J. Bradley Smith, an analyst at Stonecap Securities Inc., told clients, “the magnitude of adjustments required to arrive at management’s estimate of sustainable bank earnings tempers our enthusiasm.”

TD lost 2.7 percent to C$73.29. CIBC decreased 2.2 percent from a post-2007 high to C$79.31. Royal Bank of Canada, which reports earnings tomorrow, slipped 0.9 percent to C$55.72.

SXC surged 10 percent to a record C$43.96. In a note to clients, Tom Liston, an analyst at Versant Partners Inc., called the purchase “yet another smart acquisition by SXC at a great price.”

Gildan Activewear Inc., the largest Canada-based clothing manufacturer, tumbled 7.2 percent, the most since June 2009, to C$29.19. The company today announced a forecast that implies it will earn $1.80 a share next year, Claude Proulx, an analyst at Bank of Montreal, said in a note to clients. The average analyst estimate in a Bloomberg survey is $1.96 a share.

Colossus Minerals Inc., which is developing a precious-metals project in Brazil, jumped 10 percent to a record C$9.63. The company held a site visit for analysts and investors and published an update on its progress earlier this week.

To contact the reporters on this story: Inyoung Hwang in New York at

Matt Walcoff in Toronto at

To contact the editor responsible for this story: Nick Baker at

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