Canadian stocks advanced, erasing a weekly drop in the benchmark index, as weaker-than-forecast reports on retail sales and consumer prices were overshadowed by a rise in German business confidence.
Osisko Mining Corp. jumped 7.1 percent after beating earnings estimates. Financial shares advanced, as Sun Life Financial Inc. and Fairfax Financial Holdings Ltd. rallied at least 1.4 percent. Centerra Gold Inc. tumbled 8.9 percent following reports the government wants to review its Kyrgyzstan mine. Agrium Inc. fell 5.2 percent and Potash Corp. of Saskatchewan Inc. slid 1 percent as fertilizer companies were downgraded by Dahlman Rose & Co.
The Standard & Poor’s/TSX Composite Index rose 61.66 points, or 0.5 percent, to 12,701.63 in Toronto. The S&P/TSX ended up 0.1 percent for the week, as today’s gain helped the market recover from a 1.3 percent drop over the past two days. Trading was 2.4 percent higher than the 30-day average.
“It’s a snapback from the selling over the last few days,” Greg Taylor, fund manager with Aurion Capital Management, said in a phone interview. The Toronto-based firm manages about C$8 billion ($8 billion). “Everyone’s been waiting for a dip to buy, so this could be the dip. The key to this will be seeing how long it lasts.”
German business confidence increased to a 10-month high in February, indicating that Europe’s largest economy may be gathering strength. Ifo institute’s business climate index, based on a survey of 7,000 executives, climbed to 107.4 in February from a revised 104.3 in January.
Canada’s inflation rate fell in January to its lowest since 2009 and retail sales plunged in December, adding to evidence the country’s economy is struggling to accelerate from its slowest pace since the 2009 recession.
Eight out of 10 groups in the benchmark index advanced. Sun Life Financial climbed 1.6 percent to C$29.25, while Fairfax Financial rallied 1.4 percent to C$393.50.
Osisko, the gold explorer, added 41 Canadian cents to C$6.20. The company posted fourth-quarter adjusted earnings of 12 Canadian cents a share, topping the average analyst estimate of 7 Canadian cents.
Gold for April delivery dropped 0.4 percent to settle at $1,572.80 an ounce in New York, a seven-month low, as signs of economic optimism eroded demand for the precious metal as a haven. The metal tumbled this week on speculation the Federal Reserve will wind down U.S. monetary stimulus.
Centerra, the Canadian operator of the Kumtor mine in Kyrgyzstan, tumbled 68 Canadian cents to C$6.93, the lowest close in six months. The Toronto-based company said the government wants to review its agreement to run the Kumtor project and that it received a $315 million claim for alleged environmental damage.
Agrium, the Calgary-based fertilizer maker, tumbled C$5.61 to C$103.14, while Potash slid 39 Canadian cents to C$39.96. Dahlman Rose analyst Charles Neivert downgraded fertilizer companies, citing increasing pressure on nutrients after the first half of the year as well as future risk in earnings.
BlackBerry, formerly known as Research and Motion Ltd., dropped 4.6 percent to C$13.48. MKM Partners LLC cut its rating on the company to sell from neutral.