Canada Stocks Snap Five-Day Slump on Spain Budget Talks
Canadian stocks rose for the first time in six days after Spain announced new austerity measures and commodities rallied on speculation China will introduce stimulus to support economic growth.
Colossus Minerals Inc. (CSI) advanced 4.4 percent as gold rallied the most in two weeks. Niko Resources Ltd. jumped 8.8 percent as crude climbed the most in eight weeks. Research In Motion Ltd. (RIM) added 1.2 percent before posting better-than-expected second- quarter earnings after market close.
The Standard & Poor’s/TSX Composite Index (SPTSX) soared 105.99 points, or 0.9 percent, to 12,338.85 in Toronto. Raw-materials stocks rose 1.9 percent to lead gains as eight of 10 industries advanced. The benchmark Canadian gauge is up 3.3 percent this month.
“All the market needed was a little encouragement,” said David Cockfield, managing director with Northland Wealth Management in Toronto, which oversees about C$200 million. “People say if Spain goes, then what happens to Italy, and how will the banking system hold together? So any solutions suggested would be very positive.”
Spanish Prime Minister Mariano Rajoy’s government announced its fifth austerity package, including a new tax on lottery winnings and a cut in ministries’ spending to shrink the euro area’s third-biggest budget deficit. The Shanghai Securities News, operated by the Xinhua News Agency, said there was speculation the China Securities Regulatory Commission would announce 10 measures to boost equities.
Colossus rose 4.4 percent to C$5.65 and Argonaut Gold Inc. (AR) added 4.8 percent to C$10.27. Gold futures for December delivery increased 1.5 percent to $1,780.30 in New York. The S&P GSCI Spot Index, which tracks a basket of 24 major commodities, jumped 1.3 percent to 660.29, its biggest increase in eight weeks.
China is the world’s biggest consumer of copper and a major importer of Canada’s commodity products.
“The markets needed some relief here,” said John Kinsey, a fund manager with Caldwell Securities Ltd. in Toronto. The firm manages about C$1 billion. “The rumors about stimulus in China have been there for some time because the numbers do point to a slowdown in their economy.”
Niko Resources, the worst-performing stock in the S&P/TSX this year, jumped 8.8 percent to C$12.49. Petrobank Energy & Resources Ltd. (PBG) climbed 2 percent to C$13.46 and PetroBakken Energy Ltd. (PBN) rose 2.4 percent to C$13.95. Suncor Energy Inc. (SU), Canada’s largest energy company by market value, advanced 1.3 percent to C$32.42. Crude for November delivery rallied 2.1 percent to settle at $91.85 a barrel in New York.
Paramount Resources Ltd. (POU) soared 8.7 percent to C$29.72 and Trilogy Energy Corp. (TET) surged 7.4 percent to C$25.17. The excess of U.S. natural gas inventories has shrunk to 9 percent above the five-year average, compared with the beginning of the refill season in April when inventories were 61 percent above normalized levels, research from Bloomberg Industries shows.
First Quantum Minerals Ltd. (FM) increased 3.1 percent to $20.88 and Inmet Mining Corp. (IMN) gained 3 percent to C$47.44. Copper for December delivery rose 0.9 percent to settle at $3.744 a pound in New York. Prices have risen 8.3 percent this month, heading for the biggest monthly advance since January.
RIM rose 1.2 percent to C$6.96. The company wrapped up its annual developers’ conference in California.
After-market, RIM reported a second-quarter loss of 27 Canadian cents, better than an expected loss of 47 Canadian cents a share from analysts surveyed by Bloomberg. RIM shares rose in extended trading.
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