Canadian stocks rose the most since March 2009 as banks and commodity producers rallied after central banks in Europe, Asia and North America cut lenders’ borrowing costs to bolster the financial system.
Goldcorp Inc., the world’s second-largest gold producer by market value, rallied 7.2 percent as the metal gained on demand for a hedge against inflation. Suncor Energy Inc., Canada’s biggest oil and gas producer, increased 5.1 percent as crude futures advanced for a fourth day. Royal Bank of Canada, the country’s largest lender by assets, increased 5 percent after the Federal Reserve and five other central banks agreed to lower prices for dollar funding via swap arrangements.
The Standard & Poor’s/TSX Composite Index climbed 471.67 points, or 4 percent, to 12,204.11, paring its monthly loss to 0.4 percent. Ninety-two percent of S&P/TSX stocks advanced, the most since at least 2004.
“You got a big, big announcement out of China on their reserves, and if the Europeans can get their stupid act together, which it looks like they may be doing, the market is going to move very aggressively on the upside,” Gerry Brockelsby, a money manager at Marquest Asset Management Inc. in Toronto, said in a telephone interview. The firm oversees about C$250 million ($246 million).
The index had retreated this month on concern the European debt crisis might weaken the global economy. The S&P/TSX Financials Index, the largest part of the equity gauge, was set as of yesterday to end November with the biggest monthly drop since October 2009.
The central banks of the U.S., U.K., Canada, Japan, Switzerland and euro region reduced the interest rate on the funding for European banks to ease strains in markets and boost the central banks’ capacity to support the global financial system, according to a statement from the U.S. Federal Reserve.
The S&P/TSX Materials Index rallied the most in a day since September 2009. Precious metals companies advanced as the U.S. dollar fell against all other major currencies.
Goldcorp climbed 7.2 percent to C$54.95. Barrick Gold Corp., the world’s largest company in the industry, increased 5 percent to C$54.05. Centerra Gold Inc., which mines in Kyrgyzstan and Mongolia, surged 12 percent, the most since April 2009, to C$22.76.
Base-metals producers rose after China cut the amount of cash banks set aside as reserves for the first time since 2008. Copper rallied the most since Oct. 27 on the Comex in New York and zinc surged the most since June 2010 on the London Metal Exchange.
Teck, First Quantum
Teck Resources Ltd., Canada’s largest base-metals and coal producer, advanced 9 percent to C$37.35. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, rallied 11 percent to C$20.60. SouthGobi Resources Ltd., which mines coal in Mongolia, soared 10 percent to C$7.94. Avalon Rare Metals Inc., which explores for rare-earth elements in Canada, jumped 22 percent to C$3.43.
Crude oil surpassed $100 a barrel on the New York Mercantile Exchange. Suncor climbed 5.1 percent to C$30.72. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, rose 5.4 percent to C$38.31. Cenovus Energy Inc., Canada’s fifth-biggest company in the industry by revenue, gained 6.2 percent to C$33.47.
All S&P/TSX banks and insurers advanced. Royal Bank increased 5 percent to C$47.26 to complete its biggest three-day climb since August 2009. Toronto-Dominion Bank, its largest domestic rival, rose 4.8 percent to C$73. Bank of Nova Scotia, Canada’s third-biggest lender by assets, gained 4 percent to C$51.55.