BLBG: Canada Stocks Gain as Oil Rally Continues on China Growth
Canadian stocks advanced, led by energy shares, as oil surged to a seven-month high, helping extend a commodity rally that had lifted the Toronto market to its biggest monthly gain in a decade in May.
Suncor Energy Inc., the world’s second-largest oil-sands producer, and Petro-Canada, the nation’s second-largest oil refiner, gained at least 3 percent.
The Standard & Poor’s/TSX Composite Index added 221.34, or 2.1 percent, to 10,591.34 at 10:55 a.m. in Toronto, and traded at the highest intraday level since Oct. 14. The equity benchmark surged 11 percent in May, the most since December 1999 as the Reuters/Jefferies CRB Index of energy, metal and agricultural prices gained the most since July 1974.
Crude rose to as much as $68.29 a barrel, the highest price since Nov. 5, after a gauge of purchasing by China’s manufacturers expanded for a third-straight month, adding to evidence that the world’s third-largest economy is recovering from its deepest slump in almost a decade.
Suncor advanced C$1.21 cents to C$39.46 and Petro-Canada jumped C$1.84 to C$49.38 as a gauge of energy producers in the S&P/TSX gained 3.3 percent.
Finning International Inc., the world’s biggest dealer in Caterpillar Inc. equipment, surged 12 percent to C$16.50, the largest gain since Oct. 14, as U.S. manufacturing shrank in May at the slowest pace in eight months, a further sign that the worst of the recession may be over. The Institute for Supply Management’s factory index rose to 42.8 from 40.1 in April. Readings below 50 signal contraction.
Copper Miners
Mining companies advanced as copper prices soared to the highest since October on a weakening dollar and China’s purchasing expansion. Teck Resources Ltd., Quadra Mining Ltd. and Lundin Mining Corp. gained at least 7 percent.
Financial shares in the S&P/TSX gained 2.3 percent after RBC Capital Markets upgraded the group to “overweight,” saying loan losses were lower than estimated in the second quarter. Bank of Montreal added 2.4 percent to C$44.85. Toronto-Dominion Bank advanced 1.1 percent to C$56.21.
Goldcorp Inc., the world’s second-largest gold producer, slipped 3.6 percent to C$41.59 after saying it will sell about $750 million of convertible senior notes due in 2014 to repay a revolving credit facility and fund capital spending.
Africa Oil Corp., an oil and gas exploration firm, jumped 5.2 percent to C$1.63 after signing a production sharing agreement with Black Marlin Energy Ltd., a Dubai-based exploration company, for oil in northern Kenya. Africa Oil will transfer a 20 percent license interest to Black Marlin’s unit, East African Exploration Ltd.
