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Canadian Stocks Rise for Second Day, Led by Financials, Energy

Dec. 19 (Bloomberg) -- Canadian stocks rose a second day, led by bank and energy stocks, after the International Monetary Fund said the nation’s central bank should avoid raising interest rates until the end of 2013 to help fuel growth.

Uranium One Inc. added 7.1 percent for a fourth day of gains after the pro-nuclear Liberal Democratic Party won a landslide election victory in Japan on Dec. 16. Royal Bank of Canada and Toronto-Dominion Bank rose at least 1.1 percent as financial stocks contributed most to gains in the Standard & Poor’s/TSX Composite Index. Taseko Mines Ltd. gained 6 percent after reaching a tentative labor deal with workers at its mine in British Columbia.

The S&P/TSX rose 69.29 points, or 0.6 percent, to 12,403.63 in Toronto. The equity gauge has gained 3.8 percent this year.

“Today is a day of risk-off with financials leading the way,” said John Goldsmith, deputy head of equities with Montrusco Bolton Investments Inc. in Toronto. His firm manages about C$5.2 billion ($5.27 billion).

The IMF said the Canadian central bank has room for further monetary easing if growth fades. The federal government is on track to balance its budget by 2015 and has room for new temporary fiscal stimulus if needed, the IMF said in a report.

The Bank of Canada has kept its key lending rate at 1 percent for more than two years, the longest pause since the 1950s. The country’s expansion is estimated to be “just below 2 percent” in 2013, the IMF said.

Wholesale Sales

Canadian wholesale sales rebounded in October from the biggest drop in almost two years, led by higher food and motor vehicle receipts. Other reports published this month have shown greater-than-forecast increases in employment and building permits.

Royal Bank of Canada, the nation’s largest lender, advanced 1.1 percent to C$60.53 and Toronto-Dominion added 1.2 percent to C$83.10. Bank and energy stocks contributed most to gains in the S&P/TSX as nine of 10 industries advanced. Trading volume was 17 percent higher than the 30-day average.

Cenovus Energy Inc. increased 1.3 percent to C$33.35 and Husky Energy Inc. rose 1.2 percent to C$29.13 as oil rallied for a fourth day. Crude for January delivery climbed 1.8 percent to settle at $89.51 a barrel in New York.

Uranium One soared 7.1 percent to C$2.26. The LDP, led by Shinzo Abe, captured a two-thirds majority in Japan’s lower house of parliament in an election on Dec. 16. The country shut down its atomic reactors after last year’s tsunami and earthquake triggered a meltdown at the Fukushima Dai-Ichi nuclear power plant. The LDP campaigned on Japan’s need to restart the reactors.

Taseko, a copper and molybdenum mining company working in British Columbia, rallied 6 percent to C$3. The company said it has reached a tentative labor agreement at its Gibraltar copper mine in southern British Columbia. The deal is subject to ratification by the union.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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