A mix of economic news helped stoke commodity price gains on Tuesday, driving Canada's benchmark stock index to its second positive finish this week.
The S&P/TSX composite index trimmed some of its earlier gains to end the day at 12,270.66, up 73.94 points, or 0.61%. Seven of the 10 sub-indexes advanced, led by consumer goods, up 1.8%, and materials, up 1.79%.
The price of crude oil rose 93 cents US to close at US$102.24 a barrel in New York trading, while gold rose US$23.40 to US$1,631.50 an ounce.
The economic data that drove the increases was fair-to-middling at best - industrial production data from France beat estimates, but in China it was a drop in imports that led to a bigger-than-expected trade surplus, which gave rise to speculation that the central bank might want to inject some stimulus to give the country's sluggish economy a push. Meanwhile, Alcoa forecast a 7% increase in aluminum demand in 2012 - slower than the 11% growth in 2011, but when production cuts are taken into consideration, should result in an aluminum deficit this year, the company said. That forecast pushed aluminum prices higher.
"What's probably helping Canada is ongoing speculation that we could get some monetary stimulus in China to combat what appears to be a slowing-down there," Gareth Watson, vice-president of investment management and research at Richardson GMP Ltd. in Toronto, told Bloomberg.
The Canadian dollar also rose for a second day, gaining 57 basis points to close at US98.33¢.
"You're seeing a strong move in equities, which is for the most part driving sentiment and supporting the Canadian dollar," Mark McCormick, a New York-based currency strategist at Brown Brothers Harriman & Co., told Bloomberg.
Canada's junior Venture exchange rose 14.75 points, or 0.97%, to 1,542.23.
In the U.S., the Dow Jones industrial average closed the day at 12,462.47, up 69.78 points or 0.56%, while the Nasdaq composite rose 25.94 points, or 0.97%, to 2,702.50.
In Canadian corporate news, Nexen Inc. rose 7.79% to $18.40 on Tuesday after it announced chief executive Marvin Romanow would be leaving the company.
Kevin Reinhart, who most recently served as chief financial officer, was appointed to the role on an interim basis.
"We see this as a drastic step by the board in restoring shareholder confidence in the company, and closing a valuation gap that has been persistent for several years," said George Toriola, analyst at UBS.
