Canada Stocks Rise on Metals Rally as China Considers Measures

  • Zinc, copper lead climb as China weighs moves to boost prices
  • Oil snaps 3-day advance as supply gluts continue to weigh

Canadian stocks rose in light trading as raw-materials producers rallied with industrial metals on news China is considering measures to support slumping prices, overshadowing a drop in energy shares after crude halted a three-day gain.

Copper producer First Quantum Minerals Ltd. added 6.4 percent as raw-materials producers climbed 1.1 percent, offsetting a 0.6 percent retreat in oil producers. European markets rose as the MSCI All-Country World Index of developed and developing markets advanced a second day. U.S. markets are closed for the Thanksgiving holiday.

Zinc and copper led an advance in base metals as China weighed state purchases, output cuts and a probe into short-selling in an effort to stem the rout in commodities prices this year. The country’s largest copper and nickel suppliers plan to meet this week to weigh their response to declines, according to people with knowledge of the matter. The London Metal Exchange’s index of six industrial metals is heading for its biggest annual decline since the global financial crisis.

Crude futures fell for the first time this week, declining 1.2 percent in New York after advancing 6.6 percent the previous three days as figures showed this week that U.S. stockpiles are increasing to near a record, countering signs drilling is slowing.

Suncor Bid

The Standard & Poor’s/TSX Composite Index rose 21.77 points, or 0.2 percent, to 13,425.19 at 4 p.m. in Toronto on trading volume 64 percent lower than the 30-day average. It has dropped 8.3 percent this year, trailed only by Singapore and Greece among developed markets. 

Energy and raw-materials producers, along with health-care stocks, have fallen at least 21 percent this year to lead declines in the S&P/TSX. A combination of slowing economic growth in China and a rally in the U.S. dollar due to impending interest-rate increases from the Federal Reserve as soon as December have crimped commodities prices.

Canadian Oil Sands Ltd. fell 0.9 percent, erasing an earlier gain after Suncor Energy Inc. said in a regulatory filing there was a “real” chance it won’t extend its $4.5 billion bid for the company if the deadline is extended. Canadian Oil Sands yesterday said it has met with one potential rival bidder and has plans to do the same with at least three others in coming weeks.

Pharma Moves

Valeant Pharmaceuticals International Inc. increased 2.2 percent, halting a three-day retreat. Shares of the embattled drugmaker declined yesterday after a hedge fund long bearish on Valeant published a new list of pharmacies it said were probably tied to the company. Valeant said the allegations contained "significant inaccuracies."

Briefly the largest company in Canada by market capitalization this year, Valeant has plunged 66 percent from an Aug. 5 high amid scrutiny by investors, lawmakers and regulators over its pricing practices.

Jean Coutu Group Inc. tumbled 8.4 percent, the most in seven years, after the Quebec government introduced a bill that would open up a bidding system for the manufacture of generic drugs in the province, potentially cutting profit at the firm. Jean Coutu operates retail pharmacies and makes generic drugs through its Pro Doc Ltd. unit.

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