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Canadian Stocks Rise as Gold, Oil Advance During Egypt Clashes

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Jan. 28 (Bloomberg) -- Canadian stocks rose, led by energy and mining shares, as clashes between protesters and police in Egypt raised the prospect of tighter fuel supplies and spurred demand for gold as a haven from political instability.

Suncor Energy Inc., Canada’s biggest oil and gas producer, advanced 3.9 percent after Egypt imposed a nationwide curfew. Barrick Gold Corp., the world’s largest producer of the metal, increased 3 percent as gold futures jumped the most in 12 weeks. Bank of Montreal, the country’s fourth-largest lender by assets, fell 1.3 percent as financial companies declined.

The Standard & Poor’s/TSX Composite Index rose 27.38 points, or 0.2 percent, to 13,437.58 to complete a 1.4 percent weekly gain.

“If Egypt was in flames, it’s natural people would become worried that oil supplies would suffer,” said David Baskin, president of Baskin Financial Services Inc. in Toronto, which manages C$360 million ($360 million). “Same idea: If there’s going to be a lot of uncertainty, you’re always going to see this shift to gold.”

The S&P/TSX has dropped less than 0.1 percent this month as gold declined 6.1 percent and oil retreated 2.2 percent. Energy and raw-materials companies make up 49 percent of Canadian stocks by market value, according to Bloomberg data.

An index of S&P/TSX energy companies climbed to a 28-month high as crude futures increased the most since September 2009. Concerns that the Egyptian clashes may lead to a closure of the Suez Canal led to the surge in oil prices, Salzer said.

Suncor Rises

Suncor advanced 3.9 percent to C$40.04. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, increased 2.8 percent to C$43.08. Cameco Corp., the world’s second-biggest uranium producer, gained 3.6 percent to C$39.96.

S&P/TSX gold stocks advanced 2.4 percent, stretching their weekly gain to the most since Dec. 3. The S&P/TSX Gold Index had plunged 12 percent this month through Jan. 21.

“The last three weeks have seen a very, very large selloff in gold, gold stocks, silver,” said Arthur Salzer, who oversees C$160 million as a money manager at MacNicol & Associates Asset Management Inc. in Toronto. “These new political headwinds and tensions are creating the demand for traders to go back into the space.”

Barrick rose 3 percent to C$47.39. Agnico-Eagle Mines Ltd., Canada’s fifth-largest gold producer, gained 2.7 percent to C$69.16. Silver reseller Silver Wheaton Corp. rallied 5.6 percent to C$31.47. First Majestic Silver Corp., which mines in Mexico, soared 8.1 percent to C$12.23 for thee biggest gain in the S&P/TSX.

Banks Slide

Were it not for precious-metals and energy stocks, the S&P/TSX would have fallen by more than 68 points.

“If energy prices go up, the world becomes more expensive, and indeed much more uncertain,” said Brendan Caldwell, chief executive officer of Caldwell Investment Management Ltd. in Toronto, which manages C$1 billion. “Oil stocks are going to do well in that environment, but everyone else is going to get hit. The only thing the market hates with a visceral passion is uncertainty.”

The S&P/TSX Banks Index declined the most in a week. BMO lost 1.3 percent to C$57.84. Bank of Nova Scotia, the country’s third-largest bank, decreased 1.1 percent to C$56.02. Toronto-Dominion Bank, the No. 2 lender by assets, retreated 1.2 percent to C$74.48.

AGF Management Sinks

Mutual-fund company AGF Management Ltd. sank 4.4 percent, the most in a year, to C$18.03 after reporting fourth-quarter profit that, excluding certain items, matched the average analyst estimate in a Bloomberg survey. AGF had advanced 9.9 percent in the two months ending yesterday, more than three times the gain of the S&P/TSX Financials Index.

Producers of metals used in industry dropped. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper-mining company, fell 4.6 percent to C$114.49. Teck Resources Ltd., the country’s biggest base-metals and coal producer, slipped 2.2 percent to C$57.86.

Magna International Inc., Canada’s largest auto-parts maker, declined 5.6 percent from a record close to C$57.79. Ford Motor Co., a Magna customer, tumbled 13 percent after reporting a smaller profit than all 14 analysts in a Bloomberg survey had forecast.

BlackBerry maker Research In Motion Ltd. lost 2.1 percent to C$60.16. Canada’s largest technology company dropped out of the top five in worldwide mobile-phone market share in the fourth quarter, market-research firm IDC said today.

TransAlta Corp., Canada’s largest publicly traded electricity producer, decreased 3 percent, the most since June, to C$21.06. Robert Kwan, an analyst at Royal Bank of Canada, cut his rating on the shares to “underperform” after rating TransAlta “sector perform” since 2007.

To contact the reporter on this story; Matt Walcoff in Toronto at mwalcoff1@bloomberg.net.

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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