Canadian stocks rose to a two-week high, as precious metals producers rallied after U.S. labor data and comments from U.S. Federal Reserve Chairman nominee Janet Yellen signaled further stimulus.
B2Gold Corp. climbed 5.1 percent as the price of the metal halted a five-day losing streak. Pan American Silver Corp. jumped 7.8 percent as silver rallied. CGI Group Inc., the company that has come under scrutiny for its work on the Obamacare health exchange, surged 4.3 percent after reporting fourth-quarter earnings that topped estimates.
The Standard & Poor’s/TSX Composite Index climbed 60.72 points, or 0.5 percent, to 13,431.38 at 4 p.m. in Toronto, the highest since Oct. 30. The benchmark Canadian equity gauge has advanced 8 percent this year, the third-worst performance among global developed markets, ahead of Hong Kong and Singapore.
“It’s a green light, as that was the biggest fear, that the Fed would take away the punch bowl,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4 billion ($3.8 billion). “Definitely, the testimony is positive for the markets. She does have to contend with some hawks, and we’ll see whether she’s a compromiser, but right now it looks like no tapering until March.”
The U.S. economy and the job market are performing “far short of their potential” and a strong recovery will ultimately enable the Fed to reduce its stimulus, Yellen said in testimony at her nomination hearing today.
Investors have been watching for signals on whether the Fed will taper its $85 billion a month in bond purchases. The stimulus has fueled a rally in equities this year.
Raw-materials stocks rallied 1 percent to pace gains in the S&P/TSX, as eight of 10 industries advanced. Trading volume was 11 percent higher than the 30-day average.
B2Gold gained 5.1 percent to C$2.46 and Agnico Eagle Mines Ltd. increased 4.5 percent to C$30.74. Gold surged 1.4 percent to settle at $1,286.30 an ounce in New York, halting a five-day slump that was its longest since August. The S&P/TSX Gold Index climbed 2 percent as 22 of 24 members advanced.
Pan American Silver jumped 7.8 percent to C$11.59 and Silvercorp Metals Inc. added 3.5 percent to C$2.99 as silver futures for December delivery increased 1.4 percent.
CGI Group climbed 4.3 percent to C$39.24, a record high after rising for a ninth time in 10 sessions. The company’s merger with Logica Plc and the resulting contracts have fueled profit and sales. Its contract developing the U.S. federal government’s health-insurance exchange is a small part of CGI’s revenue.
Linamar Corp. soared 14 percent to a record C$40.72 for the biggest gain in the S&P/TSX. The Guelph, Ontario-based auto parts maker reported third-quarter adjusted profit of 80 Canadian cents a share, topping analysts’ projections for 66 cents.
Tourmaline Oil Corp. increased 5.4 percent to C$42.62 and Canadian Natural Resources Ltd. rose 2.6 percent to C$33.11 as crude fluctuated after touching a five-month low in New York. Encana Corp. climbed 2.3 percent to C$19.02 to snap a three-day slide.
Turquoise Hill Resources Ltd. slumped 7.8 percent to C$4.27, for a sixth day of declines. The miner disclosed it was unable to obtain project financing for its Oyu Tolgoi copper project in Mongolia. Potential investors balked at uncertainty over when the company will be able to resolve “issues” with the government.