Canadian Stocks Rise as U.S. Dollar Falls, Gold Futures Advance
Canadian stocks rose the most in a week, led by producers of precious metals and energy, as commodities rallied on a decline in the U.S. dollar.
Barrick Gold Corp., the world’s largest producer, gained 2 percent as the metal advanced. Suncor Energy Inc., Canada’s biggest oil and gas producer, increased 1.6 percent after Macquarie Group Ltd. boosted its oil-price forecasts. Teck Resources Ltd., Canada’s largest base-metals and coal producer, surged 3 percent as copper climbed.
The Standard & Poor’s/TSX Composite Index rose 119.09 points, or 0.9 percent, to 13,559.20, the highest level since August 2008.
“Most people are on the page that global growth is going to move up” favoring mining, oil and gas shares, said Ian Nakamoto, director of research for MacDougall MacDougall & MacTier Inc. in Toronto, which manages about $4 billion. “Global growth plus diversifying from the U.S. dollar, that’s good for Canada, because we’re so commodity-oriented.”
The S&P/TSX was one of two developed market benchmarks that had a monthly decline through yesterday, slipping less than 0.1 percent as its gold stocks tumbled 11 percent. Eight of the world’s 17 largest gold companies by revenue are Canadian.
The U.S. dollar dropped to the lowest against a basket of world currencies since Nov. 22, boosting precious-metal prices, as the U.K. reported higher inflation than most economists had forecast and a German investor-confidence index advanced to a six-month high.
Gold gained 0.6 percent in New York, while silver surged 2.1 percent from a five-week low.
Barrick advanced 2 percent to C$47.81. Centerra Gold Inc., which mines in Kyrgyzstan and Mongolia, climbed 4.3 percent to C$17.96. Silver reseller Silver Wheaton Corp. rose for the first time in a week, jumping 4.2 percent to C$32.57.
Iamgold Corp., which mines in Africa, South America and Quebec, soared 5.3 percent to C$18. The company provided a forecast that, according to David Haughton, an analyst at Bank of Montreal, would mean a 50 percent increase in gold output by 2013. Iamgold also said it has held talks with investors in Southeast Asia that may allow it to “unlock value” in some of its assets.
Aurizon Mines Ltd., which also produces gold in Quebec, jumped 4.1 percent to C$6.64 after Pierre Vaillancourt, an analyst at Macquarie, raised his rating on the stock to “outperform” from “neutral.”
“Aurizon has established itself as a consistent operator and we look for the company to deliver on production growth in 2011,” Vaillancourt wrote in a note to clients.
Silvercorp Metals Inc., which mines silver in China, surged 7.6 percent to C$10.92 after Andrew Kaip, an analyst at BMO, boosted his rating on the Vancouver-based company to C$15 from C$13.25. In a note to clients, Kaip cited the stock’s drop of more than 22 percent since early December.
Macquarie analysts said today that West Texas Intermediate crude oil should average $95 a barrel this year, $113.50 a barrel in 2012 and $119 in 2013. Oil futures fluctuated near Jan. 14’s close of $91.54 a barrel today.
Suncor rose 1.6 percent to C$38.79. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, advanced 1.8 percent to C$42.40. EnCana Corp., Canada’s largest natural gas producer, gained 3.1 percent to a five-month high of C$31.88.
Metals, Coal Producers
An index of S&P/TSX base-metals and coal producers climbed for the first time in four days. Teck increased 3 percent to C$63.84. Lundin Mining Corp., the base-metals producer planning to merge with Inmet Mining Corp., rose 4.5 percent to C$7.94. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, rallied 4.5 percent to C$26.13.
Northern Dynasty Minerals Ltd., which is developing a copper, gold and molybdenum project in Alaska, rose 8 percent to C$18.54. Investors may believe a company such as Rio Tinto, Mitsubishi Corp. or Anglo American Plc will try to buy Vancouver-based Northern Dynasty, said Adam Graf, an analyst at Dahlman Rose & Co.
Farm commodities climbed after the U.S. Agriculture Department said Turkey bought 145,000 metric tons of wheat while Kansas and China suffered from abnormally dry conditions.
Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, gained 2.1 percent to $172.53. Agrium Inc., Canada’s second-biggest fertilizer producer, advanced 2.3 percent to C$94.12, the highest intraday since July 2008.
Brookfield Asset Management Inc., Canada’s largest publicly traded real-estate company, rose 3 percent to C$33.28. The company agreed to buy Fairholme Capital Management LLC’s stake in General Growth Properties Inc. in a deal valued at about $1.7 billion.
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