TORONTO (Reuters) – Toronto’s main stock index advanced to a one-week high on Monday in a broad rally led by energy and financial companies, as positive U.S. and European news boosted investor appetite for riskier assets.
World stocks rallied along with oil after a merger between two major banks in Greece gave investors a rare bit of encouraging news out of Europe.
An unexpected surge in U.S. consumer spending for July — which indicated the economy was not falling back into recession further improved sentiment.
“It’s a dim light, but still a light at the end of the tunnel,” said Serge Pepin, head of investments at BMO Investments Inc. “Investors and market participants want to cling to those positive numbers.”
All of the market’s 10 main groups were stronger. Energy issues rose 2.6 percent as oil prices advanced on strong U.S. equities and relief that Hurricane Irene was less severe than expected.
Canadian Natural Resources topped the list of influential climbers, jumping 3.47 percent to C$36.05. Suncor Energy followed, rising 2.6 percent to C$30.56.
Heavyweight financials, up 1.5 percent, were also among the top advancers at the start of the second week of bank-earnings season. Bank of Nova Scotia , which will release its quarterly results on Tuesday, rose 2 percent to C$52.35. Manulife Financial was up C$4.6 percent at 13.29.
The Toronto Stock Exchange’s SP/TSX composite index closed up 177.34 points, or 1.44 percent, at 12,504.85. Earlier it reached a session high of 12,523.92, its strongest since August 18.
Monday’s rally added to gains from Friday’s session, when markets started to embrace riskier assets after a speech from U.S. Federal Reserve Chairman Ben Bernanke left the door open for fresh stimulus for the U.S. economy.
“Investors feel that there’s a little bit more breathing room from what the Fed had to say on Friday,” Pepin added. “We know that the Fed and the central banks are staying vigilant.”
Gold miners, down 1.52 percent as bullion prices tumbled, held back the TSX, causing the index to underperform its U.S. counterparts.
Among the biggest decliners, Barrick Gold lost 1.9 percent to C$49, and Goldcorp fell 1.3 percent to C$50.30.
AuRico Gold was the third heaviest laggard, plunging more than 19 percent to C$11.05 after the company said it will buy Northgate Minerals for C$1.46 billion ($1.49 billion) to create an intermediate-sized gold company.
“The golds have been very volatile, so they sort of march to their own drummer,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.
Kinsey added that trading volume was very light due to the impact of Hurricane Irene on U.S. markets. With public transport still struggling to return to service in New York on Monday, many Wall Street firms were understaffed.
“It’s kind of a day that you shouldn’t read too much into,” he said.
In other company news, shares of Magna International rose 4.4 percent to C$37.20 after the company announced it will invest C$432 million over six years to develop electric vehicle technologies along with the government of Ontario. www.bgocled.com
World stocks rallied along with oil after a merger between two major banks in Greece gave investors a rare bit of encouraging news out of Europe.
An unexpected surge in U.S. consumer spending for July — which indicated the economy was not falling back into recession further improved sentiment.
“It’s a dim light, but still a light at the end of the tunnel,” said Serge Pepin, head of investments at BMO Investments Inc. “Investors and market participants want to cling to those positive numbers.”
All of the market’s 10 main groups were stronger. Energy issues rose 2.6 percent as oil prices advanced on strong U.S. equities and relief that Hurricane Irene was less severe than expected.
Canadian Natural Resources topped the list of influential climbers, jumping 3.47 percent to C$36.05. Suncor Energy followed, rising 2.6 percent to C$30.56.
Heavyweight financials, up 1.5 percent, were also among the top advancers at the start of the second week of bank-earnings season. Bank of Nova Scotia , which will release its quarterly results on Tuesday, rose 2 percent to C$52.35. Manulife Financial was up C$4.6 percent at 13.29.
The Toronto Stock Exchange’s SP/TSX composite index closed up 177.34 points, or 1.44 percent, at 12,504.85. Earlier it reached a session high of 12,523.92, its strongest since August 18.
Monday’s rally added to gains from Friday’s session, when markets started to embrace riskier assets after a speech from U.S. Federal Reserve Chairman Ben Bernanke left the door open for fresh stimulus for the U.S. economy.
“Investors feel that there’s a little bit more breathing room from what the Fed had to say on Friday,” Pepin added. “We know that the Fed and the central banks are staying vigilant.”
Gold miners, down 1.52 percent as bullion prices tumbled, held back the TSX, causing the index to underperform its U.S. counterparts.
Among the biggest decliners, Barrick Gold lost 1.9 percent to C$49, and Goldcorp fell 1.3 percent to C$50.30.
AuRico Gold was the third heaviest laggard, plunging more than 19 percent to C$11.05 after the company said it will buy Northgate Minerals for C$1.46 billion ($1.49 billion) to create an intermediate-sized gold company.
“The golds have been very volatile, so they sort of march to their own drummer,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.
Kinsey added that trading volume was very light due to the impact of Hurricane Irene on U.S. markets. With public transport still struggling to return to service in New York on Monday, many Wall Street firms were understaffed.
“It’s kind of a day that you shouldn’t read too much into,” he said.
In other company news, shares of Magna International rose 4.4 percent to C$37.20 after the company announced it will invest C$432 million over six years to develop electric vehicle technologies along with the government of Ontario. www.bgocled.com
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