MW: Canadian equities up on hopes for euro-zone rescue
By Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — Canadian equities climbed Wednesday, finding support from news that the International Monetary Fund aims to expand its lending fund to a total of $1 trillion.
The S&P/TSX Composite Index CA:$ISPTX +0.67% rose 0.4%, or 52.645points, to trade at 12,285.28, off the session’s high of 12,346.74.
“Based on staff’s estimate of global potential financing needs of about $1 trillion in the coming years, the [IMF] would aim to raise up to $500 billion in additional lending resources,” an IMF spokesman said in a statement. “At this preliminary stage, we are exploring options on funding and will have no further comment until the necessary consultations with the Fund’s membership have been completed.” Read more on the IMF.
At this point, there are “far too many unknowns,” said economists at Scotia Capital, in a note, pointing out the uncertainty surrounding who would “pony up” such funds and what form the funds would come in.
Meanwhile, the Bank of Canada on Tuesday maintained its target for the overnight rate at 1%.
It left the overall outlook for the nation’s economy little changed from its October policy report, but also said the outlook for the global economy has deteriorated and uncertainty has increased since the October report.
The central bank released its Monetary Policy Report on Wednesday. The tone from the report shows that “despite the strong growth in 2011, the bank remains cautious,” said Andrew Kelvin, senior fixed income strategist at TD Securities, in a note. “The crisis in Europe remains the dominant risk to the outlook and the bank is unlikely to begin tightening policy until that risk has been resolved.”
In Toronto Wednesday, the S&P/TSX Capped Industrials Index XX:TTIN +1.74% climbed 1.6% as shares of Bombardier Inc. CA:BBD.B +2.80% added 2.6%.
But the S&P/TSX Capped Information Technology Index XX:TTTK -0.12% lost 0.3%. Shares of Research In Motion Ltd. CA:RIM -3.27% RIMM -3.03% fell 3.1% after Samsung Electronics Co. denied a report that it was considering a buyout of the smartphone maker. Read more on RIM.
Shares of TransCanada Corp. CA:TRP -2.20% also fell by 3.3%. Reports emerged Wednesday that the Obama administration will announce that it has rejected TransCanada’s application to build and operate a pipeline from Canada to the Gulf of Mexico.
Shares of Kinross Gold Corp. CA:K +1.73% KGC +1.97% saw its stock tack on 1.1%. The stock sank 21% on Tuesday after Kinross said it will require an additional six to nine months of analysis and planning to develop its Tasiast gold mine in Mauritania and expects to record a “material” non-cash impairment charge in connection with the project. Read more about the Kinross mine.
In currencies, the Canadian dollar gained ground against the greenback. The U.S. dollar USDCAD -0.30% traded at 1.0127 in recent action, down 0.2% from late Tuesday.
