Canadian stocks erased early losses as Research In Motion Ltd. rallied the most in seven weeks amid rising confidence for its BlackBerry 10 smartphones.
RIM surged 13 percent as it sent invitations to analysts today for the formal unveiling of its new line of phones on Jan. 30. Teck Resources Ltd. declined 2.1 percent as China’s inflation spiked. TransGlobe Energy Corp. slumped 6.4 percent after saying it will abandon a well in South Mariut, Egypt.
The Standard & Poor’s/TSX Composite Index rose 2.44 points, or less than 0.1 percent, to 12,602.18 in Toronto, erasing earlier losses of as much as 0.4 percent. The index gained 0.5 percent for the week and reached the highest level since March 2. It , This is the highest close since Mar. 2. The S&P/TSX has risen 2.6 percent during the past year, ranking the index the worst performer among the 24 developed markets tracked by Bloomberg.
Canadian stocks will catch up this year as growth improves from China to the U.S., according to Paul Vaillancourt, who helps manage C$63 billion at Fiera Capital.
“We’re quite optimistic,” Vaillancourt, senior vice president and managing director for Western Canada at Fiera in Calgary, said in a phone interview. The “Canadian market is so much leveraged to global growth. With any sort of uncertainty subsiding and investors deciding to get back to equity markets and risk assets, that would obviously benefit Canada even more.”
Stocks fell through much of the day after China’s inflation accelerated more than forecast to a seven-month high as the nation’s coldest winter in 28 years pushed up vegetable prices, a pickup that may limit room for easing to support an economic recovery.
Teck Resources, Canada’s largest diversified mining company, dropped 2.1 percent to C$36.95. Suncor Energy Inc., the country’s largest energy producer, slipped 0.2 percent to C$33.52.
Canada recorded a C$1.96 billion trade deficit in November, up from a revised C$552 million gap in October, Statistics Canada said today in Ottawa. The shortfall was the fourth-highest trade deficit on record and wider than all 21 forecasts in a Bloomberg survey of economists.
“So much of the Canadian stock market is materials and energy related, which is really dependent on the exports to emerging markets,” Greg Taylor, fund manager with Aurion Capital Management in Toronto, said in a phone interview. The firm manages about C$8 billion. The higher inflation in China “meant there is less chance they would keep more stimulus activity going. If they were to stop, that would potentially slow down some of the demand.”
RIM surged 13 percent to C$13.31, the biggest gain in Toronto since Nov. 22. The stock rose the most since April 2009 in New York trading. Invitations for the BlackBerry 10 lineup’s unveiling are a sign the oft-delayed device is real and going to be released on time, said Anil Doradla, an analyst at William Blair & Co. in Chicago.
RIM had fallen as much as 2.6 percent earlier, after Vodafone Group Plc said BlackBerry customers in Europe, the Middle East and Africa experienced connection problems this morning. The mobile phone carrier said the problem was caused by a router error and services were being restored.
Tim Long, analyst with BMO Capital Markets, also cut the stock to underperform from market perform while trimming the price target to $9 from $12.
First Quantum Minerals Ltd. climbed 1.6 percent to C$21.39. The copper producer said it’s confident other investors will follow the lead of Inmet Mining Corp.’s biggest shareholder and back its C$5.1 billion ($5.2 billion) hostile bid.
TransGlobe tumbled 6.4 percent to C$8.85, the most in the S&P/TSX, after reporting a dry hole at the first of three planned exploration wells at its South Mariut project. The Al Azayem No. 1 well will be plugged and abandoned after TransGlobe found no hydrocarbons in what was expected to be the primary reservoir, the company said today in a statement.