Canada Stocks Jump Most in 4 Months as Commodities Rally

Canadian stocks rose the most in more than four months as raw-materials producers advanced after weaker-than-forecast inflation in China boosted metals prices.

Barrick Gold Corp. and Goldcorp Inc. climbed at least 1.5 percent as gold advanced. Teck Resources Ltd. and First Quantum Minerals Ltd. rallied more than 1.5 percent as copper rose. Endeavour Silver Corp. surged 8.3 percent as the metal’s price increased the most since January. Royal Bank of Canada and Toronto-Dominion Bank, the nation’s largest lenders, added more than 0.5 percent amid better-than-estimated housing data.

The Standard & Poor’s/TSX Composite Index rose 139.49 points, or 1.1 percent, to 12,484.05 at 4 p.m. in Toronto, its biggest increase since Nov. 19. The benchmark equity gauge erased its loss for the year. Trading volume was 9.8 percent lower than the 30-day average.

“The inflation data presents some support that as China’s economy is slowing there is still growth,” Anish Chopra, managing director and fund manager with TD Asset Management Ltd. in Toronto, said. His firm oversees about C$204 billion ($201 billion). “It’s positive that there’s still demand in the economy. People were concerned about a significant slowdown in commodities.”

Consumer prices in China increased 2.1 percent in March from a year earlier, the country’s statistics bureau said today. Analysts surveyed by Bloomberg forecast a 2.5 percent gain. The reading fell from February’s increase of 3.2 percent, reducing pressure on policy makers to tighten credit. China is the world’s biggest user of industrial metals and Canada’s second-largest trading partner.

Raw Materials

Investors also weighed first-quarter results from Alcoa Inc. The largest U.S. producer of aluminum posted earnings that surpassed analyst estimates while its sales fell short of forecasts.

Raw-materials stocks increased the most in the S&P/TSX. The group jumped 2.4 percent for its biggest gain since March 6. Gold climbed 0.9 percent to settle at $1,586.70 an ounce, copper added 2.1 percent to $3.4415 a pound, and silver advanced 2.7 percent to $27.881 an ounce, the largest jump since Jan. 30.

Barrick Gold increased 1.5 percent to C$27.15, while Goldcorp gained 3.1 percent to C$32.93. Turquoise Hill Resources Ltd., which is developing the Oyu Tolgoi gold deposit in Mongolia, climbed 6.2 percent to C$6.54.

Teck Resources, Canada’s largest diversified miner, jumped 4.9 percent, the biggest increase since November, to C$29.37. First Quantum Minerals, a copper miner, rose 1.5 percent to C$19.24. Endeavour Silver surged 8.3 percent to C$6.37.

Oil Advances

Niko Resources Ltd. surged 14 percent, the biggest gain in the S&P/TSX, to C$7.14, as oil advanced for a second day. Suncor Energy Inc., Canada’s largest energy producer, jumped 3.1 percent to C$29.84.

Pacific Rubiales Energy Corp. soared 7.8 percent to C$21 after reporting daily output in the first quarter was close to the upper end of its target range. Chief Executive Officer Ronald Pantin said today in a statement that the oil and gas company will try to cut operating costs by about $8 per barrel for the rest of the year.

Royal Bank rose 1.2 percent to C$60.17 and TD Bank advanced 0.5 percent to C$81.11, as each snapped a four-day losing streak.

Canadian housing starts unexpectedly increased for a second month in March and building permits rose in February, evidence that low borrowing costs are supporting construction.

“Canada’s housing starts exceeded expectations, so that was great,” Chopra said. “People were concerned about a slowing Canadian economy, so now we have some positive data points.”

Agrium Inc. dropped 2.8 percent to C$96.55 after investors rejected a slate of dissident board nominees promoted by activist shareholder Jana Partners LLC, which has called for changes at the Calgary-based fertilizer maker.

Before it's here, it's on the Bloomberg Terminal.