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Canada Stocks Rise as Retail Data Lifts Consumer-Staples Shares

Sept. 24 (Bloomberg) -- Canadian stocks rose for a second day as consumer shares rallied after better-than-expected retail sales boosted prospects for economic growth.

Alimentation Couche-Tard Inc. advanced 2.5 percent to lead consumer-staples producers higher. Canadian Utilities Ltd. added 2.5 percent to pace gains among utilities companies. Air Canada, the nation’s largest airline, rallied to a two-year high. BlackBerry Ltd. dropped 3.3 percent as investors weighed a $4.7 billion deal to take the smartphone maker private.

The Standard & Poor’s/TSX Composite Index rose 37.71 points, or 0.3 percent, to 12,848.89 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has surged 5.9 percent this quarter and is up 3.3 percent in 2013. Trading volume was 2.9 percent below the 30-day average.

“The retail numbers are showing that GDP numbers are going to look a little bit better because of that,” said Paul Harris, partner and portfolio manager at Avenue Investment Management, which manages C$300 million ($290 million), said in a phone interview from Toronto. “They show that the market is a little bit better.”

Statistics Canada said today that retail sales rose more than forecast in July, reversing a drop a month earlier and adding to evidence that growth in the world’s 11th largest economy is gaining momentum.

All 10 main industries in the benchmark equities gauge advanced. Producers of consumer staples rallied the most, adding 1.1 percent with 10 of 11 members rising.

Alimentation Couche-Tard, which operates 24-hour convenience stores, jumped 2.5 percent to C$65.33. North West Co., a general purpose retailer, gained 2.8 percent to C$24.

Utilities, Phones

Canadian Utilities gained 2.5 percent to C$35.68 as utilities stocks increased 0.8 percent as a group.

Air Canada gained 5.7 percent to C$3.52, the highest close since January 2011. The stock has rallied 7.3 percent in the past three days. The company yesterday said it was looking for bids for several U.S. cross-border routes, beginning in mid-2014.

Phone stocks gained for an eighth day, with the S&P/TSX Telecom Services Index closing at its highest level since June 18. Manitoba Telecom Services Ltd. gained 0.9 percent to C$33.20 and Telus Corp. rose 0.3 percent to C$35.56, a three-month high.

Energy shares added 0.1 percent, erasing earlier losses after U.S. President Barack Obama said recent overtures from Iran may offer a basis for a “meaningful agreement” to resolve the confrontation over the Persian Gulf nation’s nuclear program, one of the primary sources of instability in the Middle East. Oil fell to an eight-week low but remained 6.8 percent higher this quarter, the most in a year, and up 12 percent in 2013.

‘Quite Attractive’

Commodities stocks “are quite attractive,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. The firm manages about C$1 billion. “The oil stocks, some of them now have performed quite nicely so they’re catching up” to the price of oil, he said.

Commodity shares, which have lost 29 percent this year, fluctuated between gains and losses as investors watched a looming political clash over the U.S. budget that could shut down the federal government as early as next week and damp growth in the world’s biggest economy. America is Canada’s largest trading partner and the second-biggest user of industrial metals such as copper.

BlackBerry dropped 3.3 percent to C$8.78, below the $9 a share that its biggest shareholder, Fairfax Financial Holdings Ltd., agreed to pay in a tentative buyout deal.

The $4.7 billion offer forges a path to go private after years of losing ground to Apple Inc.’s iPhone and Google Inc.’s Android.

To contact the reporters on this story: Aubrey Pringle in New York at apringle1@bloomberg.net; 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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