Canadian Stocks Rise as Bank Rally Overshadows Economy

Canadian stocks rose as advancing energy and financial companies overshadowed data showing an unexpected drop in jobs and a slump in the pace of home starts.

Petrobank Energy & Resources Ltd. surged 5.4 percent as Brent crude climbed to a nine-month high. Financials rallied, as Manulife Financial Corp. and Brookfield Asset Management Inc. added at least 2 percent. Heroux-Devtek Inc., a maker of aircraft landing gear, slid 1 percent as third-quarter profit fell short of analysts’ estimates. Just Energy Group Inc., the electricity and natural gas utility, tumbled 13 percent after cutting its dividend.

The Standard & Poor’s/TSX Composite Index climbed 45.31 points, or 0.4 percent, to 12,801.23 at 4 p.m. in Toronto. Seven of 10 industry groups in the index rose. About 717 million shares traded hands on Canadian exchanges today, or about 5.9 percent below the three-month average. The gauge climbed 0.3 percent this week, extending its gain for the year to 3 percent.

“Today we’re in the normal post-earnings consolidation phase in markets generally, and Canada’s no different,” Bob Decker, a money manager at Aurion Capital in Toronto, said in a phone interview. His firm manages about C$6 billion. High volatility in the employment data means “we’re just giving back some of the strong gains from last year.”

Canadian employers unexpectedly cut jobs in January while home builders slowed the pace of new construction to the least since 2009, suggesting a languid start to the new year for the country’s economy. Employment fell by 21,900 in January on declines in manufacturing and education, Statistics Canada reported today.

Energy Jumps

Energy shares rallied, as Petrobank jumped 5 Canadian cents to 97 Canadian cents, for the best performance in the benchmark index today. Talisman Energy Inc., an oil an gas producer, rallied 1.3 percent to C$12.75, its highest level since October.

Brent crude surged to a nine-month high in London. Stronger-than-expected trade data from China signaled increased fuel demand in the world’s second-biggest consuming country. China’s exports rose 25 percent in January from a year earlier and crude imports increased to the highest level in eight months, custom figures showed.

“Energy has been under pressure for a while, with prices coming off, so I think people taking a longer-term view are beginning to see that there’s some good value,” Michael Sprung, president of Toronto-based Sprung & Co. Investment Counsel Inc., said in a phone interview.

Financial Shares

Financial shares contributed the most to gains in the S&P/TSX. Brookfield, the global asset management company, jumped 95 Canadian cents to C$38.82, its highest level since October 2007. Sun Life Financial Inc., the country’s third-largest insurer, advanced 1.2 percent to C$29.37.

Manulife Financial, Canada’s largest insurer, climbed 30 Canadian cents to C$14.84. Manulife Mutual Funds said it surpassed $20 billion in assets under management in 2012.

Catamaran Corp., the fourth-biggest drug-benefits manager, fell 2.7 percent to C$51.71. A Wedbush Securities report suggested the company may not have a chance to buy Cigna Corp.’s pharmacy plans.

Heroux-Devtek, the aerospace manufacturer, slid 9 Canadian cents to C$9.40. The company reported third-quarter profit of 11 Canadian cents a share, falling short of analysts’ estimate of 14 Canadian cents.

Just Energy Group tumbled C$1.31, the most since November 2006, to C$8.47. The company cut its quarterly dividend to 7 Canadian cents from 10.33 Canadian cents and trimmed its gross margin forecast.

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