Canadian Stocks Advance as Crimea Crisis Tensions EaseEric Lam
Canadian stocks rose, for the highest close since 2008, as global markets rebounded from the biggest drop in a month after Russia stepped back from escalating the crisis in Ukraine.
Magna International Inc. added 2.9 percent after analysts with Goldman Sachs Group Inc. and JPMorgan Chase & Co. raised their ratings for the company. Tourmaline Oil Corp. lost 1.1 percent after agreeing to buy Santonia Energy Inc. to increase its exploration properties in Alberta. Lundin Mining Corp. rallied 3 percent as copper prices rose for the first time in two weeks.
The Standard & Poor’s/TSX Composite Index rose 77.12 points, or 0.5 percent, to 14,289.86 at 4 p.m. in Toronto. The index has gained 4.9 percent this year.
“This is a very macro-driven tape with the Russia-Ukraine situation and whether or not it was going to break out,” said Brian Huen, managing partner at Red Sky Capital Management Ltd. in Toronto. He helps manage about C$225 million ($203 million). “Putin’s commentary this morning has helped to stabilize things and you’re seeing broad gains. Gold, which people use as a protective trade, is selling off.”
Russian President Vladimir Putin said today he’s not considering taking control of Crimea and would send in troops to Ukraine only in an extreme case. The worst stand-off between Russia and the West since the Cold War ended sent stocks tumbling around the world yesterday. The MSCI All-Country World Index rebounded 1.3 percent today.
The S&P GSCI Index of 24 raw materials declined 0.8 percent after surging to the highest since Sept. 6 yesterday on speculation the threat to commodities from the Crimea tensions was exaggerated. Gold for April delivery fell 0.9 percent to settle at $1,337.90 an ounce in New York.
AuRico Gold Inc. declined 4.7 percent to C$5.27 and China Gold International Resources Corp. lost 1.8 percent to C$3.35.
Tourmaline Oil fell 1.1 percent to C$49.74 after agreeing to buy Santonia Energy for C$189.1 million in stock. The board of Santonia has approved the deal, with shareholders to vote on the sale in late April.
Major Drilling Group International Inc. jumped 8 percent to C$9.68, the biggest gain since September 2012, after Kam Mangat with Salman Partners Inc. raised the stock’s rating to buy from hold, citing the company’s improving gross margins and strong balance sheet.
Lundin Mining rallied 3 percent to C$5.22 and First Quantum Minerals Ltd. added 1.8 percent to C$21.34 as copper prices rebounded from a three-month low.
Valeant Pharmaceuticals International Inc. added 2.1 percent to C$162.20 as health-care stocks added 1.8 percent as a group. Nine of 10 industries in the S&P/TSX advanced on trading volume 16 percent lower compared with the 30-day average.
Valeant’s Bausch & Lomb unit has sued Novartis AG’s Sandoz unit claiming a generic-drug application violates a patent for the Bepreve eye drug.
Magna International, the auto-parts maker, rallied 2.9 percent to a record C$106.71. The stock has advanced for five days and posted better-than-forecast earnings yesterday. Patrick Archambault, an analyst with Goldman Sachs, and Ryan Brinkman of JPMorgan raised their ratings on the stock to neutral.