Canadian stocks rose, breaking a five-day losing streak, as energy companies gained with oil on optimism Europe will act to slow the region’s debt crisis.
Suncor Energy Inc., Canada’s largest oil and gas producer, gained 1.6 percent as crude rebounded from its lowest close since February. Canadian Natural Resources Ltd., the country’s third-largest energy company by market value, rose 1.2 percent. Royal Bank of Canada, the biggest lender, increased 0.6 percent as financial shares recovered from a five-day retreat.
The Standard & Poor’s/TSX Composite Index rose 91.47 points, or 0.8 percent, to 12,026.76 in Toronto. The benchmark measure of Canadian stocks had lost 4.6 percent since April 2.
“It’s a technical bounce off a pretty oversold market in the last few days,” Danielle Park, a money manager at Venable Park Investment Counsel Inc. in Barrie, Ontario, said in a telephone interview. The firm manages at least C$1 million ($1 million) each for more than 200 clients. “It’s exactly what we’ve seen the last two years: A crescendo into April in terms of risk rally for a few months, and then economic data starts a sell-off.”
After the S&P/TSX rallied 11 percent between Jan. 29 and April 26 in 2010, it retreated 9.7 percent through July 5 of that year. In 2011, it was up 6.2 percent year to date as of April 5 before slumping 22 percent in the next six months.
The benchmark gauge rose 3.7 percent in the first quarter this year as economic data surpassed estimates and investors speculated that the euro area would contain its sovereign-debt crisis. The Canadian index had its biggest weekly drop of the year last week on renewed concern over Europe as French borrowing costs rose and Spain’s Prime Minister Mariano Rajoy said the nation faces “extreme difficulty.”
Canadian energy shares increased as oil rose after the U.S. Energy Department said fuel stockpiles declined and a European Central Bank official signaled that the lender may restart bond purchases for Spain.
Suncor gained 1.6 percent to C$30.12. Canadian Natural Resources advanced 1.2 percent to C$31.67. Niko Resources Ltd., which produces oil and gas in South Asia, rose 8.1 percent to C$35.56.
Financial companies in the S&P/TSX rose for the first time since April 2. Banks and insurance companies had declined on economic concerns as U.S. reports on factory orders and job growth missed forecasts.
Royal Bank of Canada increased 0.6 percent to C$56.30. Bank of Nova Scotia, Canada’s third-biggest lender by assets, rose 1 percent to C$54.91. Mutual-fund company IGM Financial Inc. gained 1.1 percent to C$46.25.
Dollarama Inc. surged 6.9 percent, the most since December 2009, to C$51.70. The Canadian discount retailer posted fourth-quarter profit that topped analysts’ estimates and raised its dividend.
Wi-Lan Inc. rose 9.7 percent to C$5.91 for it’s biggest increase since May. The U.S. validated the technology-licensing company’s V-Chip patent after a re-examination.