Canada Stocks Extend Two-Week High as Oil, Metals Producers Gain

  • Worst-performing groups in year lead three-day rally
  • Canexus surges after agreeing to sell itself to Superior

Canadian stocks rose for a third day, the longest streak in three weeks, as commodities producers extended a rally after the price of metals and oil jumped.

Makers of energy and raw materials led a 0.7 percent increase in Canadian equities. Crude in New York rose to the highest in a month, while copper capped its longest winning streak in two weeks. Resources have gained as the U.S. dollar slips amid speculation interest rates will remain low for longer. While commodities producers have rallied at least 10 percent since Sept. 28, they remain the index’s biggest drag this year with losses of more than 16 percent.

The Standard & Poor’s/TSX Composite Index rose 95.06 points to 13,647.26 at 4 p.m. in Toronto, extending a Sept. 21 high. The benchmark Canadian equity gauge has climbed 3.1 percent in three days, rebounding from a 4 percent slump in September. The index has lagged global peers among developed markets this year with a 6.7 percent decline.

Canada’s merchandise trade deficit widened in August as exports fell 3.6 percent, including a 20.9 percent drop in crude oil and bitumen. The deficit expanded to C$2.53 billion ($1.93 billion) from July, exceeding the most bearish forecasts, according to Statistics Canada Tuesday from Ottawa.

Commodities producers have rallied as the U.S. dollar has weakened on bets the Federal Reserve will delay raising interest rates. The Bloomberg Dollar Spot Index slipped 0.6 percent for a fourth straight decline, the longest streak since Aug. 24.

Barrick Gold Corp. rallied 6.1 percent and Yamana Gold Inc. increased 8.9 percent. Gold for December delivery climbed 0.8 percent to settle at $1,146.40 an ounce in New York. The price has advanced for three sessions, the longest rally in six weeks. Higher interest rates curb the demand for gold, which doesn’t pay interest and is seen as an alternative investment.

Chemical products company Canexus Corp. soared 25 percent, a record, after agreeing to sell itself to Superior Plus Corp. in an all-share deal that implies a 48 percent premium from yesterday’s close. Superior lost 5.9 percent, the most since July 23.

First Quantum Minerals Ltd. jumped 21 percent after announcing plans to cut net debt by greater than C$1 billion through asset sales and other moves. The company also lowered its production forecasts for 2015 to 385,000 to 410,000 tonnes from a July 29 estimate of 410,000 to 440,000 tonnes. First Quantum has surged 53 percent in three days, the most since 2009.

Bombardier Inc. soared 15 percent, the most in almost a month, after Reuters reported the planemaker had approached Airbus Group SE about acquiring a majority stake in the company’s struggling CSeries jetliner.

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