Canadian Stocks Rise to Five Month High as Gold Producers Gain

  • Crude producers conclude meeting without production freeze
  • Gold gains a second day as investors seek haven amid selloff

Canadian Stocks Hit Five-Month High

Canadian stocks rose, reversing an earlier loss to close at a five-month high as gold producers gained a second day amid demand for haven assets, while energy shares wiped out declines.

The benchmark Standard & Poor’s/TSX Composite Index equity gauge added 0.6 percent to 13,719.82 at 4 p.m. in Toronto, the highest close since Oct. 29. The increase extended a rally after the index advanced by the most last week since mid-March. The S&P/TSX remains one of the best-performing developed markets in the world this year with a 5.5 percent gain. Trading volume was 15 percent lower than the 30-day average.

West Texas Intermediate crude slipped 1.7 percent in New York, clawing back much of an earlier decline that reached as much as 6.8 percent as traders turned their attention to a labor strike in Kuwait that cut output for a second day. Kuwait, the fourth-largest member of OPEC, has seen its output cut by about 60 percent due to the worker strike.

A meeting between the world’s largest oil producers in Doha on Sunday, which dragged on for more than 10 hours beyond its initially scheduled conclusion, finished with no final accord. Saudi Arabia maintained its stance that it wouldn’t restrain its production without commitments from other producers including Iran to do the same, a move Iran is resisting. OPEC and non-OPEC producers may meet again in June, according to a Nigerian minister.

Energy producers in the S&P/TSX added 1.4 percent, after retreating as much as 1.8 percent. Canadian Natural Resources Ltd. and Enbridge Inc. added at least 1.9 percent to lead the industry higher in mixed trading, with 36 of 50 companies in the S&P/TSX Energy Index in positive territory.

Yamana Gold Inc. added 2.9 percent as raw-materials producers advanced 1.1 percent. Gold rose a second day as the selloff in oil increased demand for the precious metal as a haven. Teck Resources Ltd. and First Quantum Minerals Ltd. climbed more than 6.9 percent as copper rebounded from a loss while zinc climbed for a second session as stockpiles in London dropped to the lowest since 2009.

The resource-dominant S&P/TSX remains closely linked to moves in commodities prices, as a rebound in producers has fueled a 16 percent recovery for the S&P/TSX from a low on Jan. 20. The Canadian benchmark now trades at 21.8 times earnings, about 14 percent higher than the 19.1 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

Pembina Pipeline Corp. added 1.6 percent, climbing to an August high. The company is raising about C$150 million through a share offering to pay down debt and help fund Pembina’s capital program this year.

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