Canadian stocks rose to a one-week high as energy producers climbed with oil prices and investors await the outcome of a Federal Reserve meeting for clues to the central bank’s stimulus plans.
Tim Hortons Inc. gained the most in 22 months after activist investor Scout Capital Management LLC bought a 5.5 percent stake. Petrominerales Ltd. jumped 14 percent as its chief executive officer said it has received interest for pipeline assets. Encana Corp. and Talisman Energy Inc. advanced at least 1.8 percent after crude rose. BlackBerry gained 4 percent after an analyst with RBC Capital Markets increased his shipment estimates for the BB10 smartphones.
The Standard & Poor’s/TSX Composite Index rose 78.56 points, or 0.6 percent, to 12,367.46 at 4 p.m. in Toronto. The gauge has rallied 1.5 percent in the past two days to the highest level since June 10. Trading volume was 12 percent lower than the 30-day average.
“From a sentiment standpoint we’ve had a lot of lousy days, and I think it was overdone on the downside,” John Stephenson, fund manager with First Asset Investment Management Inc., said from Toronto. He helps manage C$2.70 billion ($2.65 billion) at the firm. “It’s idiotic if people didn’t realize that stimulus was going to end at some point. In Canada, everything that was interest-rate sensitive was slaughtered. People have reassessed things and said effectively, rates will back up but we’ve sold way beyond that.”
The Fed’s policy-setting Open Market Committee begins two days of meetings today. Officials in recent months have debated whether to scale back, or taper, their $85 billion a month in bond purchases as the world’s largest economy continues its recovery. The U.S. is Canada’s largest trading partner.
The benchmark Canadian stock index has declined 2.2 percent in June and is down 0.5 percent for the year, making it the third-worst performer among 24 developed markets in 2013.
Nine of 10 industries in the S&P/TSX advanced today. Technology companies, energy stocks and producers of consumer-discretionary products rose at least 1.2 percent to pace gains.
BlackBerry, formerly known as Research In Motion Ltd., increased 4 percent to C$15.13. Mark Sue, analyst with RBC Capital Markets, raised his estimates for BB10 smartphone shipments to 3.5 million from 2.75 million in the first quarter and 4 million from 3 million in the second.
Oil and gas stocks rose 1.2 percent as a group, for a two-week high. Encana added 2.6 percent to C$18.48 and Suncor Energy Inc. rose 1.6 percent to C$31.75.
Petrominerales soared 14 percent to C$6.82, the highest level since March 12, after saying it has received interest from prospective buyers of oil pipeline stakes and disclosing an oil discovery at one of its wells in Colombia.
Talisman Energy increased 1.8 percent to C$12.05. The company is considering selling its shale holdings in Texas for as much as $2 billion, Reuters said, referring to people familiar with the deal.
Health care stocks rose 0.8 percent. Valeant Pharmaceuticals International Inc. added 1.7 percent to C$87.74. The drugmaker has scheduled a bank meeting for this Wednesday to begin a $9.3 billion financing for its planned purchase of Bausch & Lomb, Reuters said.
Tim Hortons rallied 4 percent to C$56.05 for its biggest gain since August 2011. New York-based hedge fund Scout Capital said in a filing it has “engaged in discussions” with the coffee and doughnut retailer regarding its capital structure, spending, share buybacks and compensation.
Raw-materials producers were the only group in the benchmark index to retreat. The S&P/TSX Gold Index fell 3 percent, with 26 of 29 members declining. The precious metal’s price slumped to a three-week low on speculation the Fed may signal a reduction in economic stimulus.
OceanaGold Corp. plunged 9.8 percent to C$1.47 and Banro Corp. slid 12 percent to C$1 to lead losses among miners.