Dec. 10 (Bloomberg) -- Canadian stocks rose for a third day as gold producers posted the biggest rally in six weeks after a drop in the dollar boosted the price of the precious metal.
Dundee Precious Metals Inc. and Endeavour Silver Corp. jumped more than 5 percent, as gold and silver miners accounted for nine of the 10 biggest gains in the Standard & Poor’s/TSX Composite Index. Chorus Aviation Inc., the regional air carrier, soared 7 percent after boosting its quarterly dividend. Sunshine Oilsands Ltd. sank 6.3 percent after its chief executive and chief financial officers resigned.
The S&P/TSX rose 11.23 points, or 0.1 percent, to 13,324.01 at 4 p.m. in Toronto. The benchmark equity gauge has risen 7.2 percent this year, the fourth-worst performer among developed markets ahead of Austria, Hong Kong and Singapore.
“There’s a bear market rally in bullion, which is leading to a strength in Canadian stocks,” Bob Decker, fund manager with Aurion Capital Management Inc. in Toronto, who helps manage about C$6 billion ($5.7 billion), said in a telephone interview. “This is narrowly focused on a bounce in gold prices due to weakness in the U.S. dollar.”
Gold futures advanced 2.2 percent, the biggest gain since mid-October, and the Bloomberg U.S. Dollar Index dropped 0.3 percent for a fourth straight loss, the longest slump in two months, amid speculation that the Federal Reserve will signal short-term U.S. interest rates will remain low.
Improving economic data has spurred bets that the Fed will reduce its monthly bond buying sooner than forecast while maintaining low interest rates to spark growth. The central-bank support has helped boost global equities. Fed officials next meet on Dec. 17-18.
Producers of raw materials rallied 1.8 percent as a group as six of the 10 main industries in the S&P/TSX advanced on trading volume 25 percent higher than the 30-day average. The S&P/TSX Gold Index jumped 4.2 percent, the most since October, as all but one of the 24 components rose.
Dundee Precious Metals surged 8.1 percent to C$2.81. Detour Gold Corp. increased 9.3 percent to C$4.22 and B2Gold Corp. rose 7 percent to C$2.29.
Endeavour Silver rallied 5.5 percent to C$3.82 to lead silver miners higher as the price of the metal reached the highest in almost three weeks.
Chorus Aviation added 7 percent to C$3.99, the highest price since April. The airline operator increased its quarterly dividend to 11.25 Canadian cents from 7.5 cents, payable to shareholders on or after Jan. 17 next year.
First Quantum Minerals Ltd. tumbled 3.4 percent to C$16.96, the lowest close since Aug. 29, after employees with The Mineworkers Union of Zambia rejected a deal it signed. The workers declined the agreement that included a 10 percent pay increase next year, negotiated by the union at First Quantum’s Kansanshi copper mine.
Sunshine Oilsands fell 6.3 percent to 23 Canadian cents after the oil explorer announced CEO John Zahary and CFO Robert Pearce resigned in a statement released to the Hong King stock exchange. The company appointed David Owen Sealock as interim president and CEO.
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