Canada stocks up on precious metals, EU hopes

SAN FRANCISCO (MarketWatch) — Canadian stocks followed global shares higher on Monday after progress in the euro-zone debt negotiations and Chinese manufacturing data lifted investor sentiment. 

The benchmark S&P/TSX Composite Index CA:$ISPTX +1.78%   gained 212.79 points, or 1.8%, at 12,162.28. This was the index’s highest close in nearly five weeks. 

European leaders said Sunday that discussions were progressing over European bank recapitalization, Greek debt restructuring and the euro-zone bailout fund. A final package of measures is expected at a second summit on Wednesday. Read more on the EU summit. 

 

Metals and mining stocks were up sharply, as gold futures tracked the rise in U.S. stocks. Shares of Teck Resources Ltd. CA:TCK.B +5.75%  added 5.8% while shares of First Quantum Minerals Ltd. CA:FM +11.51% jumped 11.5%. 

Among notable movers, shares of Silvercorp Metals Inc. CA:SVM +17.36% soared as high as 20.7% after the miner said an audit of the company’s accounting practices backed the company’s financial statements against recent fraud allegations. 

Precious metals followed U.S. stocks higher on Monday. Gold for December delivery GC1Z +1.08%  rose $16.20, or 1%, to settle at $1652.30 an ounce on the New York Mercantile Exchange. Silver added 1.5%, and copper jumped 7%. Read more on precious metals. 

 

Also boosting mining stocks, Chinese data on Monday showed manufacturing expanded to a five-month high in October, quelling fears of an extended contraction. Read more on the Chinese manufacturing data. 

 

Crude-oil futures also rallied on optimism, lifting Toronto’s energy sector. Shares of heavyweight Suncor Energy Inc. CA:SU +4.33%   SU -0.28%  gained 4.3%, with shares of Canadian Oil Sands Ltd. CA:COS +3.55%  adding 3.6%. 

Crude for December delivery CL1Z +4.83%  gained $3.87, or 4.4%, to finish at $91.27 a barrel on the New York Mercantile Exchange. Read more on oil. 

 

The Canadian dollar strengthened 0.6% against its U.S. counterpart USDCAD +0.05% , with one U.S. dollar recently purchasing 1.0029 Canadian, versus 1.0088 late Friday. The loonie has rebounded nearly 6% against the greenback since the Canadian currency depreciated to a one-year low on Oct. 4. 

On Tuesday, the Bank of Canada will convene to announce its quarterly interest rate decision. Analysts largely expect the central bank to keep the key rate unchanged at 1%. 

“We continue to believe that the BoC is unlikely to cut its policy rates and that such a change would require a dramatic weakening of the global economy and a strong tightening of global financial conditions,” wrote analysts at Nomura Global Economics, adding that domestic factors like high consumer debt and housing prices will limit the bank’s willingness to slash rates. 

Source; http://www.marketwatch.com/story/canada-stocks-up-on-precious-metals-eu-hopes-2011-10-24