Canadian stocks rose the most in three weeks as Air Canada reported higher-than-estimated earnings and jobs data beat economists’ forecasts.
Air Canada, the nation’s largest airline, surged 7.2 percent after reducing costs. Manulife Financial Corp., Canada’s largest insurer, increased 2.6 percent for a fourth day of gains. Trilogy Energy Corp. plunged 9.8 percent after reporting a loss as sales declined. Detour Gold Corp. plunged 18 percent after saying it will not meet its 2013 production targets. Centerra Gold Inc. and HudBay Minerals Inc. sank at least 3.7 percent as gold dropped to a three-week low in New York.
The Standard & Poor’s/TSX Composite Index rose 84.13 points, or 0.6 percent, to 13,378.33 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has advanced 7.6 percent this year, the third-worst performance among global developed markets, ahead of Hong Kong and Singapore.
“Canada’s job numbers were modestly better than expected, so that’s positive,” said Anish Chopra, a fund manager with TD Asset Management Inc. in Toronto. His firm manages about C$216 billion ($206 billion). “It looks like the U.S. economy, at least by employment, has weathered the shutdown quite well. The reaction gold investors are having is this is another data point the Fed will use for tapering.”
The U.S. added 204,000 workers in October, ahead of the median economists’ forecast of 120,000, according to a Labor Department report today. The Federal Reserve has said improvements in employment figures may prompt a reduction, or tapering, of its stimulus program.
Canada’s jobless rate remained at 6.9 percent, the lowest since 2008, as government workers led the third straight month of job gains. Employment rose by 13,200 in October, compared to a median forecast of 11,000 from a Bloomberg survey of economists.
Air Canada jumped 7.2 percent to C$5.99, the highest close in five years, as nine of 10 industries in the S&P/TSX rose. Trading volume was 16 percent higher compared with the 30-day average.
Air Canada, the best-performing stock in the S&P/TSX in 2013 with a 242 percent advance, reported adjusted earnings of C$1.29 a share, ahead of the C$1.04 average analyst estimate in a Bloomberg survey. The company is working to reduce costs at the carrier by about 15 percent.
Royal Bank of Canada, the nation’s largest lender, rose 0.7 percent to C$70.31 and Toronto-Dominion Bank, the second-largest, increased 0.8 percent to C$96.96. The S&P/TSX Banks Index climbed 0.6 percent to a record.
Housing starts in Canada jumped to the highest level in five months in October, led by construction of multiple-unit projects such as condominiums.
Manulife climbed 2.6 percent to C$19.72 to pace gains among financial stocks. The company has advanced 6.7 percent in the past four days, and yesterday reported rising profit on higher sales of insurance and savings products.
Trilogy Energy sank 9.8 percent to C$26.76, the biggest drop since 2008 on a closing basis, after reporting a loss of 8 Canadian cents a share, compared with 17 cents of earnings a quarter ago. Sales volumes for the third quarter averaged 31,211 barrels of oil equivalent per day, a 16 percent drop from the previous quarter due to field maintenance.
Detour Gold plunged 18 percent to C$6.35, an almost five-year low. The company said in a statement it will not reach its 2013 production target of 270,000 ounces of gold and now forecasts 240,000 to 260,000 ounces.
Centerra Gold slumped 8.8 percent to C$3.54 and HudBay Minerals tumbled 3.7 percent to C$8.42. Gold futures for December delivery declined 1.8 percent to settle at $1,284.60 an ounce in New York, the lowest since Oct. 16.