BLBG: Canada Stocks Rally With Commodities as Global Markets Recover
July 30 (Bloomberg) -- Canadian stocks gained the most this week as oil and metal producers rose with global equity markets, boosted by better-than-estimated earnings data and fewer U.S. jobless claims that indicated the global economy is recovering.
Barrick Gold Gorp., the world’s largest bullion producer, added 3 percent, leading a rally in mining stocks, after profit climbed more than analysts’ estimated on higher output and lower costs. Suncor Energy Inc., the second-biggest oil-sands producer, and Canadian Natural Resources Ltd. gained as energy companies advanced on higher oil prices.
The Standard & Poor’s/TSX Composite Index added 221.39 points, or 2.1 percent, to 10,676.72 at 4:10 p.m. in Toronto, halting a two-day retreat and paring its loss for the week to 0.1 percent. The benchmark index for Canadian equity has climbed 41 percent from a five-year low on March 9.
“There are increasing signs that we might be seeing some improvement in the broad economy,” said Laura Wallace, who helps manage C$275 million ($254 million) at Toronto-based Coleford Investment Management Ltd.
The number of Americans filing claims for jobless benefits last week remained below levels seen in late June. Applications rose 25,000 to 584,000 in the week ended July 25. The average at the end of June was 616,000.
Barrick Gold reported per-share profit of 49 cents a share, excluding some items, beating the average estimate of analysts surveyed by Bloomberg by 27 percent. The company added 3 percent, the most since June 25, to C$36.82.
Gold’s Rally
Goldcorp Inc., the world’s second-largest producer of the precious metal, also advanced with the price of bullion. Gold for December delivery climbed 0.8 percent to $934.90 an ounce in New York as rising equity markets signaled increased willingness to take on risk. Goldcorp rose 2.3 percent to C$39.44.
Commodities advanced as Asian stocks rose, which Wallace said is a barometer of global health. The MSCI Asia Pacific Index added 0.7 percent after the gauge dropped yesterday for the first time in 12 days. The Reuters/Jefferies CRB Index, which tracks 19 commodities, advanced the most since March 19, adding 3.9 percent.
“The demand for commodities is coming from developing economies,” Wallace said. “If you see a recovery there, that’s especially positive for Canada because of the commodity bias in our overall economy.”
Factory Prices
Canada’s factory prices rose for the first time in three months as more orders indicated the recession may be easing and credit markets might be loosening. The industrial product price index increased 0.7 percent in June, the most since July 2008, after a revised 1.2 percent decline in May, Statistics Canada said today. The increase exceeded the 0.1 percent gain predicted in a Bloomberg survey of 16 economists.
A group of industrial companies led the S&P/TSX, rising 4.1 percent. Canadian National Railway Co., the nation’s largest railroad, advanced 4 percent to C$52.11.
Canadian Pacific Railway Ltd. rose after reporting earnings that surpassed projections as it sold a portion of its interest in the Detroit River Tunnel Partnership, offsetting declining freight volumes. The stock advanced 12 percent to C$48.61 for the biggest gain since Oct. 28.
Energy companies advanced with the prices of oil and gasoline, which rose for the first time in three days. Oil for September delivery gained 5.7 percent to $66.94 a barrel in New York. Suncor rose 4.4 percent to C$34.80, and Canadian Natural added 3.6 percent to C$63.95.
To contact the reporter on this story: Kayla Carrick in New York at kcarrick1@bloomberg.net.
