Canada Stocks Rally Most in a Year as Energy Stocks JumpOliver Renick and Eric Lam
Canadian stocks rallied the most in a year, rebounding from a four-day selloff, as energy stocks surged on speculation recent losses were overdone.
Parex Resources Inc. jumped 8.4 percent after TD Securities recommended buying the shares. Athabasca Oil Corp. and ARC Resources Ltd gained at least 6.7 percent as energy stocks surged the most in three years. Westport Innovations Inc. jumped 14 percent.
The Standard & Poor’s/TSX Composite Index climbed 1.3 percent to 14,052.97 at 4 p.m. in Toronto, the biggest advance since July 2013.
“People are seeing really deep value in the energy and mining sectors,” said Paul Reynolds, chief executive officer at Canaccord Genuity Group Inc., on the phone from New York. “We’re encouraging our clients to look at those names and accumulate positions.”
The index has fallen 10 percent since Sept. 3, trimming its advance for the year to 3.2 percent and erasing about C$286.6 billion from stocks through yesterday. Trading volume today was 39 percent higher than the 30-day average, according to data compiled by Bloomberg.
The S&P/TSX Energy Index climbed 3.2 percent, the biggest increase since November 2011, as the industry rebounded from an 11-day losing streak. The energy gauge had slumped 13 percent in the past 11 days, erasing gains for the year in the longest slump since 1997.
West Texas Intermediate oil rebounded from an earlier loss after a government report showed U.S. crude inventories expanded last week, exacerbating a global glut. WTI for November delivery rose 92 cents to settle at $82.70 a barrel in New York after dropping below $80 for the first time since June 2012.
“If you have cash to deploy, now’s the time to do it,” said Les Stelmach, a fund manager at Franklin Bissett Investment Management in Calgary.
Parex Resources, an oil and gas exploration company, jumped 8.4 percent to C$11, the most since July. TD Securities analyst Jamie Somerville raised the stock to buy from hold.
Athabasca Oil surged 10 percent to C$4.39, rebounding from an all-time low yesterday. ARC Resources increased 6.7 percent to C$28.04, the biggest advance in two years.
The S&P/TSX trades at 18.1 times reported earnings, down from a peak of 21 set in June, according to data compiled by Bloomberg.
Air Canada, the nation’s largest airline, soared 4.3 percent to C$7.05, snapping six days of losses, and WestJet Airlines Ltd. climbed 6.4 percent. A measure of U.S. airlines recently entered a bear market amid rising concern of the spread of Ebola.