Canadian Stocks Rise as S&P/TSX Rebounds From 1.7% Loss
Canadian stocks rose a second straight day, wiping out a 1.7 percent retreat in the Standard & Poor’s/TSX Composite Index, as raw-material companies and banks reversed losses amid optimism about the Europe crisis.
Barrick Gold Corp. (ABX), Goldcorp Inc. (G) and Yamana Gold Inc. (YRI) increased at least 4.8 percent as the S&P/TSX Gold Index rallied 4.9 percent to the highest level since May 2. Premier Gold Mines Ltd. (PG) surged 20 percent after finding “gold-bearing structures” at a site. Royal Bank of Canada and Toronto-Dominion Bank gained at least 1.2 percent. Romarco Minerals Inc. (R) lost 25 percent after saying a U.S. Army Corps of Engineers environmental assessment for a gold project will take longer than expected.
The S&P/TSX Composite Index (SPTSX) rose 113.02 points, or 1 percent, to 11,564.80. Its 2.5 percent increase this week is the biggest jump over two days since Jan. 3. The benchmark gauge surged 1.5 percent yesterday, the most in more than a month, and hadn’t posted back-to-back gains since the beginning of May.
“You have people thinking the Greek story is overplayed going into the weekend,” Andrew Pyle, an associate money manager on a Bank of Nova Scotia team that oversees about C$200 million ($200 million), said in a phone interview. “A lot of people are taking a step back and saying that the probability of an exit by Greece from the euro over the weekend is still pretty low. You’re also seeing some late-day cherry picking in terms of value players coming back into the market.”
The benchmark gauge on May 18 completed a third straight weekly decline as concerns mounted that the Greek debt crisis, European elections and a slowing Chinese economy may curb demand for commodities.
Materials companies in the S&P/TSX recovered from a 2.2 percent decline earlier in the day, posting a second straight rally, as gold and copper producers rose.
Barrick Gold, the world’s largest producer of the metal, climbed 6.7 percent to C$40.55. Goldcorp, the second-largest producer of the metal, rose 7 percent to C$38.40. Yamana Gold, Canada’s third-largest company in the industry by market value, gained 4.8 percent to C$14.85.
Teck Resources Ltd. (TCK/B), the country’s biggest base-metals producer, rose 4.9 percent to C$31.46. First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, gained 5.8 percent to C$18.82.
Premier Gold Mines surged 20 percent to C$4.35 after finding “gold-bearing structures” during a construction project linking the Red Lake Gold Mines and Cochenour sites.
Romarco Minerals, which is developing a gold project in South Carolina, plunged 25 percent to 61 Canadian cents after saying it will not receive a decision on a Federal 404 Wetlands permit for its Haile gold project until August 2013. The timetable is “longer than we have been targeting,” President and Chief Executive Officer Diane Garrett said in a statement.
Financial stocks in the S&P/TSX rose for a second consecutive session after decreasing as much as 1.4 percent earlier in the day. The group fell for five straight sessions last week.
Royal Bank of Canada (RY), the nation’s biggest lender, rose 1.4 percent to C$52.90. Toronto-Dominion Bank, Canada’s second-largest lender, increased 1.2 percent to C$78.73.
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