Canadian Stocks Advance to Seven-Week High as Commodities Rally

  • Energy shares jump 13% in four days, to near two-month high
  • Teck Resources soars on silver deal with Franco-Nevada

Canadian stocks rallied to the highest level since August, with commodities producers extending advances amid a resurgence in U.S. dollar-denominated assets from oil to copper. 

Energy and raw-materials producers led a 1.6 percent increase in Canadian equities. The two industries have surged in the past four days, as the weakening dollar boosts demand for commodities. The groups remain the worst performers in the benchmark index this year, with losses of at least 15 percent.

S&P/TSX Energy Index rallies as oil nears $50 a barrel in New York
S&P/TSX Energy Index rallies as oil nears $50 a barrel in New York

The Standard & Poor’s/TSX Composite Index rose 221.09 points to 13,868.35 at 4 p.m. in Toronto, the highest close since Aug. 19. The benchmark Canadian equity gauge has climbed 4.7 percent in four days, rebounding from a 4 percent slump in September. The index has lagged global peers among developed markets this year with a 5.2 percent decline.

Equities around the world are rebounding from the worst quarter since 2011, led by gains in oil and mining companies. The MSCI All Country World Index climbed a sixth straight day, the longest streak of gains since April, while the S&P 500 posted its sixth increase in seven days.

Crude in New York slipped, erasing earlier gains, to close at $47.81 a barrel. The commodity had advanced for three days, to an Aug. 31 high Tuesday. Copper climbed to a two-week high to lead an advance in industrial metals.

Canadian Natural Resources Ltd. increased 5.7 percent and Suncor Energy Inc. rose 1.7 percent as energy producers rallied 2.9 percent. The S&P/TSX Energy Index has jumped 13 percent in four days, to an almost two-month high.

Teck Resources Ltd., Canada’s largest diversified miner, surged 14 percent for the biggest increase in six weeks after it sold future silver output from a mine in Peru to Franco-Nevada Corp. for an upfront payment of $610 million. First Quantum Minerals Ltd. jumped 18 percent with the price of copper. First Quantum has rallied 81 percent in four days.

Commodities producers have rebounded as the U.S. dollar has weakened on bets the Federal Reserve will delay raising interest rates. The Bloomberg Dollar Spot Index was little changed after a four-day decline.

Bombardier Inc. sank 13 percent, almost erasing yesterday’s 15 percent gain, after the planemaker and Airbus Group SE abandoned talks on a potential business collaboration. The companies announced the end of discussions late Tuesday following a Reuters report that Montreal-based Bombardier had approached its larger rival to sell a stake in the struggling CSeries jetliner.

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