- Gold stocks jump amid speculation Fed will delay rate increase
- Oil surges to lift energy producers on production bets
Canadian stocks rebounded from a 1.2 percent slide sparked by a disappointing U.S. jobs report as gold producers surged with the metal on speculation the Federal Reserve will keep rates lower for longer.
Equities in Canada rose 0.7 percent, joining a rebound in global markets as a weakening dollar sparked a rally in commodities. A gauge of developed and developing markets rose 1.2 percent, reversing earlier losses. Banks and financial services providers tumbled as the rate on 10-year bonds retreated.
The Standard & Poor’s/TSX Composite Index rose 97.85 points to 13,339.74 at 4 pm. in Toronto, after reaching an October 2013 low on Monday. The gauge tumbled 8.6 percent in the quarter that ended Wednesday and has slumped 14 percent from an April peak.
The U.S. jobs report heightened concern that slowing global growth and recent financial-market turmoil is seeping into the American economy. The data pushed back expectations for the first interest-rate increase from the Federal Reserve in almost a decade until at least March.
“The continued validity or helpfulness of zero rates is in question, yet we still aren’t getting great growth so it’s challenging,” said Jason Brady, a fund manager at Thornburg Investment Management Inc. based in Santa Fe, New Mexico. His firm manages about $60 billion.
Gold stocks rallied 7.6 percent to the highest since Aug. 28 as the price of the metal surged 2.1 percent in New York. Goldcorp Inc. soared 6.3 percent and Agnico Eagle Mines Ltd. jumped 12 percent as all 21 members in the S&P/TSX Gold Index advanced. Teck Resources Ltd. surged 11 percent as copper futures advanced.
Encana Corp. jumped 7.6 percent and Crescent Point Energy Corp. gained 6.9 percent. Oil surged after U.S. explorers reduced the number of rigs drilling for oil to a five-year low.
Banks led a 1.2 percent retreat in financials stocks. Royal Bank of Canada lost 2.2 percent as a gauge of the nation’s largest lenders retreated 2.1 percent.
National Bank of Canada slumped 5.3 percent, the most since December 2009, after the lender said it will take a C$64 million restructuring charge in the fourth quarter and sell about 7 million shares to raise C$300 million. The lender will cut as many as 400 jobs, or 2.3 percent of its workforce, as it seeks to cut costs, according to a person familiar with the plan.
Canadian equities are among the worst-performing markets in the developed world this year with a 8.8 percent slide, led by declines among raw-materials and energy producers of at least 23 percent.