Canada Stocks Rise as Gold Miners Surge to Lead Materials Shares

Canadian stocks rose, after a two-day drop, as raw-materials producers rallied and investors awaited data for clues on when the U.S. central bank will reduce its bond-buying program.

Aurico Gold Inc. and China Gold International Resources Corp. added at least 6 percent as gold miners led gains among materials producers. Pacific Rubiales Energy Corp. climbed 3.6 percent after the crude producer received licenses from Colombia’s environmental agency for a new oil field. BlackBerry Ltd. sank 16 percent after Fairfax Financial Holdings Ltd. walked away from a $4.7 billion plan to buy the smartphone maker.

The Standard & Poor’s/TSX Composite Index gained 24.32 points, or 0.2 percent, to 13,361.78 at 4 p.m. in Toronto after falling as much as 0.2 percent earlier in the day. The benchmark Canadian equity gauge fell 0.9 percent in the prior two sessions. It has added 7.5 percent this year. Trading volume was 10 percent below the 30-day average today.

Investors are waiting for “further confidence or clarification in terms of what the Fed’s going to do,” Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc., in a phone interview from Toronto. The firm manages about C$4 billion. “There’s not a lot of action either way here. October was a great month. We can’t keep having great months.”

Stimulus from the Federal Reserve and other central banks has helped fuel a global rally in equities. The S&P/TSX surged 4.5 percent in October, for a fourth straight monthly gain and the biggest in two years.

Taper Timing

The Fed last week maintained the pace of its monthly bond buying even as policy makers noted underlying strength in the economy, which fueled speculation the central bank could cut stimulus sooner than anticipated.

Data this week on U.S. gross domestic product and employment will provide clues to whether the economy is strong enough to continue growing with less stimulus.

In Canada, a report today showed consumer confidence rose for the first time in five weeks as opinions about job security and house prices improved. The Bloomberg Nanos Canadian Confidence Index, a weekly measure of the economic mood of Canadians, advanced to 58.5 in the seven days through Nov. 1 from 57.7 the previous week.

Four of 10 main groups in the S&P/TSX rose today, led by a 2.3 percent rally among raw-materials companies. Nine of the 10 biggest advances in the broad index were gold miners. China Gold added 6 percent to C$2.85 and Aurico climbed 6.4 percent to C$4.48.

Gold Miners

The S&P/TSX Gold Index jumped 3 percent, with all 24 members advancing to snap a two-day losing streak. The metal gained 0.1 percent from a two-week low in New York. A decline in the U.S. dollar boosted demand for gold as an alternative investment.

Pacific Rubiales climbed 3.6 percent to C$22.22, halting a five-day losing streak. Colombia’s largest independent oil producer plans to start production at the well next year after the licensing process experienced repeated delays.

Energy producers retreated less than 0.1 percent as a group, as oil fluctuated near the lowest level in four months. The industry has fallen four straight days, the longest streak since August.

Advantage Oil & Gas Ltd. slid 3.6 percent to C$4.06 and Bonavista Energy Corp. dropped 2.4 percent to C$11.90 to pace the declines.

BlackBerry plummeted 16 percent to C$6.75, the lowest since September 2012. Fairfax Financial, the company’s largest shareholder, ended its bid to buy the smartphone maker, opting instead for a $1 billion bond deal and a management shakeup.

Chief Executive Officer Thorsten Heins will step down and former Sybase Inc. CEO John Chen will become executive chairman, putting him in charge of the company’s strategy.

Fairfax Financial dropped 2.5 percent to C$423.98, extending its losing streak to five days.

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