Canadian Stocks Gain, Rebounding From Seven-Month Low
Canadian stocks rose, rebounding from a seven-month low, after China’s central bank said it will ensure stable money markets and better-than-forecast U.S. data bolstered optimism in the world’s largest economy.
BlackBerry rose 1.8 percent after a Morgan Stanley analyst raised his rating on the stock. CML Healthcare Inc. surged 48 percent after LifeLabs Medical Laboratory Service agreed to buy the diagnostic services provider for about C$1.22 billion ($1.2 billion). Enbridge Inc. gained 2.3 percent after restarting part of its oil-sands pipeline system in Alberta.
The Standard & Poor’s/TSX Composite Index climbed 129.52 points, or 1.1 percent, to 11,966.38 at 12:28 p.m. in Toronto. Trading was 30 percent higher than the 30-day average.
“It’s like a tug of war between the bullish and the bearish factors out there,”Irwin Michael, portfolio manager with ABC Funds, said from Toronto. The firm manages about C$800 million. “People are worrying a lot about China. The economic data indicating that the U.S. economy is getting better is not linear.”
The benchmark gauge for Canadian equities dropped 1.3 percent yesterday to the lowest level since November as commodities producers slumped amid concern a cash crunch in China would hurt growth in the world’s biggest consumer of materials and energy.
China’s central bank said today it has provided liquidity to some financial institutions to stabilize money-market rates and will use short-term liquidity operations and standing lending-facility tools to ensure steady markets. China is Canada’s second-biggest trading partner behind the U.S.
U.S. economic data released today showed orders for durable goods rose more than forecast in May and sales of new homes climbed more than estimated to the highest level in almost five years. A separate report showed confidence among U.S. consumers climbed in June to the highest in more than five years.
The S&P/TSX has fallen 5.4 percent this month to erase a gain for the year and is on track for the first quarterly loss since the same period last year.
All ten industries in the index advanced, led by technology shares. BlackBerry, formerly known as Research in Motion Ltd., rose 1.8 percent to C$15.12 after Morgan Stanley analyst Ehud Gelblum said he expects sales of the company’s new BB10 smartphone to meet or beat his firm’s first-quarter estimates, citing strong global sales.
CML Healthcare surged 48 percent to C$10.63. Closely held LifeLabs agreed to buy the company in an acquisition that combines two of Canada’s largest medical diagnostic laboratory operators. Health-care stocks advanced 1.9 percent as a group.
Enbridge rose 2.3 percent to C$43.60 after the largest transporter of Canadian crude to the U.S. restored operations on a segment of an Alberta pipeline network and said it will restart other lines over the next “several days,” according to a statement yesterday.
The Calgary-based company shut the Athabasca and Waupisoo systems, which have total capacity to move as much as 1.17 million barrels a day, after finding a 750-barrel spill caused by severe flooding.
Producers of raw materials rallied 1.2 percent after a 3.8 percent rout yesterday as metals prices rebounded on the U.S. data and signs of relief in the Chinese cash crunch.
Teck Resources Ltd. gained 1.6 percent to C$21.56 and Silvercorp Metals Inc. rose 3.9 percent to C$2.66. Copper jumped 1.9 percent and silver added 0.3 percent. Aluminum, nickel, lead and tin also climbed.
To contact the editor responsible for this story: Lynn Thomasson at email@example.com